Loading...
Min 05/21/1996 202 Wichita Falls, Texas Memorial Auditorium Building May 21, 1996 Items 1 & 2 The City Council of the City of Wichita Falls, Texas, met in regular session on the above date in the Council Room of the Memorial Auditorium Building at 8 : 30 a.m. , with the following members present : Kay Yeager - Mayor Don Johnston - Councilors Dan Shine - Angus Thompson - Bill Daniel - J. W. Martin - Harold Hawkins - Jim Berzina - City Manager Greg Humbach - City Attorney Lydia Torres - City Clerk Mayor Yeager called the meeting to order. i The invocation was given by Alisa Covington, Word of Life Outreach Center. Mr. Arnold Oliver, Chair of the Wichita Falls Clean Community Commission, informed Council that the Texas Forestry Service and the Texas Urban Forestry Council has awarded Wichita Falls in its category the 1996 Texas Urban Forestry Award. This is presented for the efforts of the Parks and Recreation Department under the leadership of Jack Murphy and primarily for his establishing the tree nursery and Wichita Falls Parks & Recreation' s efforts in this area. Mr. Oliver presented this award to the Council as a commendation of the fact that Wichita Falls is doing a wonderful job in beautifying its city in terms of planting trees . Mayor Yeager congratulated Mr. Murphy for his efforts . Mayor stated that at the last meeting the question had been raised as to how she should be addressed, and that she wanted to inform Council, as well as the public, that she preferred to be addressed as Mayor. Item 3a Moved by Councilor Martin that the minutes of the May 7, 1996 meeting be approved. 203 Item 3a cont' d. Motion seconded by Councilor Shine and carried by the following vote . Ayes : Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays : None Items 42-5c Moved by Councilor Martin that the Consent Agenda be approved. Motion seconded by Councilor Johnston and carried by the following vote . Ayes : Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays : None Item 4a RESOLUTION NO, 62-96 RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO A CONTRACT WITH LONE STAR GAS COMPANY FOR MOVEMENT OF ITS FACILITIES FOR THE MCGRATH CREEK CHANNEL AND SPILLWAY IMPROVEMENTS Item 4b RESOLUTION NO. 63-96 RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO A CONTRACT WITH VISTA CABLEVISION FOR MOVEMENT OF ITS FACILITIES FOR THE MCGRATH CREEK CHANNEL AND SPILLWAY IMPROVEMENTS Item 5a-5c Minutes of the following boards and commissions were received. a. Board of Electrical Examiners, May 9 , 1996 b. Planning and Zoning Commission, April 15, 1996 c . Landmark Commission, February 28 , 1996 7 r Mayor Yeager asked that at this time Mr. Paul Hughes present the report from the Infrastructure Committee . Mr. Paul Hughes, Chair of the Citizens Advisory Committee on Infrastructure and Economic Development, acknowledged the members of the Committee and expressed appreciation for their work and time . Mr. Hughes presented the report which was provided to the Council and a copy of which is attached hereto as an Exhibit and made a part of these minutes . 204 Item 5a-5c con 'd. Committee recommended that capital improvement projects of this magnitude be studied individually and try to zero in on the scope and the need and figure out what the options are from a funding standpoint . Committee recommended that the same procedure be used on the main projects like the Library, City Communications, Fire Protection, and the Callfield Reliever. Committee recommended funding these projects in order to leave Council with flexibility to react to mandates and changing needs of our citizens . This is for Council to make the decisions on funding and keep the General Fund flexible in that area. When citizens vote and mandates increase, that cost should be passed on because the citizens voted on it . That will leave money to fund the capital projects and infrastructure annually. Increase mandated by citizens should not be taken out of the infrastructure or capital dollars . That money should be kept available for improvements . Committee' s second recommendation was that the City de-annex that portion that is in Archer County and call for an August election for the adoption of a one cent sales and user tax under Sec . 4A of the State Development Corporation Act . Required wording on the ballot would be as follows . "The adoption of a sales and use tax for the promotion and development of new and expanded business enterprises at the rate of one-half of one percent, and the adoption of additional sales and use tax within the City at a rate of one-half of one percent to be used to reduce property tax rate . Citizens would vote for that proposition. Mayor and Councilors expressed appreciation to the Committee j for their work. Item 6a A public hearing was held on the proposed use of Community Development Block Grant (CDBG) and Home Program Funds under the Consolidated Plan. Mayor Yeager declared the public hearing open. Mr. Dave Clark stated that there are two funds which are being discussed this morning which are CDBG funds anticipated in the amount of $1, 965, 000 and Home Program Funds in the amount of $502, 000 . In addition, there is a program income that is part of the monies made during the year off various aspects of the program in the amount of $22, 887, for a total of $2, 813 , 035 . Purpose of the public hearing is to allow comment from the citizens on their general use feelings about the potential for the funds . Applications have been accepted on this and will be reviewed at a later date and brought to Council for their full consideration and for a second public hearing. 205 Item 7a ORDINANCE NO. 71-96 ORDINANCE WAIVING SECTION 27-30 OF THE CODE OF ORDINANCES WITH RESPECT TO PLACING A SIDEWALK ON THE SOUTH SIDE OF U. S . HIGHWAY 82 AND 277 (EAST) , ADJACENT TO THE NORTH LINE OF LOT 1, BLOCK 4A, S .R. LUDOLPHUS SUBDIVISION Moved by Councilor Thompson that Ordinance No. 71-96 be passed. Motion seconded by Councilor Hawkins and carried by the following vote . Ayes : Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays : None Item 8a RESOLUTION NO, 64-96 RESOLUTION APPROVING AND AUTHORIZING A CONTRACT FOR THE LEASING OF THE FISHING BARGE AT LAKE KICKAPOO, AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE INSTRUMENT; FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS , RESOLUTION WAS DISCUSSED WAS OPEN TO THE PUBLIC AS REQUIRED BY LAW Moved by Councilor Daniel that Resolution No. 64-96 be passed. Motion seconded by Councilor Martin. Councilor Martin brought up the issue of liability insurance requirement . City Attorney stated that liability insurance would be a requirement . Mr. Clark informed that there was one change to the lease under Item No. 3 "Conditions" . Requirement is that they repair and maintain the existing restroom in an operable condition at all times . Motion carried by the following vote . Ayes : Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays : None Item 8b A proposed resolution was presented approving and authorizing a lease agreement with the Wichita Falls Boating Club for a lot at Lake Wichita. Moved by Councilor Daniel that proposed resolution be passed. 206 Item 8b cont'd. Motion seconded by Councilor Johnston. Councilor Daniel stated that he had been contacted by a member of the Parks Board in regards to accessing the lake . Parks Board would like to have time to look at this situation and possibly work out an agreement with the Boating Club for the use of their ramp. Moved by Councilor Daniel to table this resolution until Parks Board can look into public access to Lake Wichita. Motion seconded by Councilor Hawkins . Councilor Shine brought up the point that if this was tabled the lease would need to be extended on a month-to-month basis until this is reviewed. Councilor Martin suggested extending the lease for ninety days . Councilor Daniel and Hawkins agreed. Al Norris, 3706 Cumberland, serves on the Parks Board, informed that the Parks Board would be meeting this week and they wanted time to discuss this situation and possibly make a recommendation to the Council . Motion to table this resolution until a report is presented by Parks Board, and approval of a ninety day extension to the Wichita Falls Boating Club lease carried by the following vote . Ayes : Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays : None Item 8c RESOLUTION NO 6 -96 RESOLUTION TO APPROVE CONTRACT WITH ENGINEERING FIRM OF CORLETT, PROBST & BOYD, INC. FOR ENGINEERING DESIGN AND CONSTRUCTION PHASE SERVICES FOR STRUCTURAL REHABILITATION PROJECT AT THE JASPER STREET WATER TREATMENT PLANT Moved by Councilor Hawkins that Resolution No. 66-96 be approved. Motion seconded by Councilor Johnston and carried by the following vote . Ayes : Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays : None 207 Item 8d RESOLUTION NO, 66-96 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WICHITA FALLS, TEXAS, AUTHORIZING THE CITY MANAGER TO EXECUTE AN ENCROACHMENT AGREEMENT WITH BILL GUILLIAMS ACROSS PORTIONS OF BURNETT AND WARREN STREETS RIGHTS-OF-WAY, BLOCK E, ORIGINAL TOWNSITE, WICHITA FALLS, TEXAS; FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS RESOLUTION WAS PASSED WAS OPEN TO THE PUBLIC AS REQUIRED BY LAW Moved by Councilor Martin that Resolution No. 67-96 be passed. Motion seconded by Councilor Johnston and carried by the following vote . Ayes : Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays : None Item 9a Moved by Councilor Hawkins to award bid for the City' s annual supply of diesel and unleaded fuel to Grozier Mann Company. Motion seconded by Councilor Johnston and carried by the following vote . Ayes : Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays : None Item 9b RESOLUTION N0, 67-96 RESOLUTION TO AWARD BID TO EARTH BUILDERS, INC. FOR PROJECT TO ABANDON DRAIN VALVES AT LAKE DIVERSION Moved by Councilor Shine that Resolution No. 68-96 be passed. Motion seconded by Councilor Johnston and carried by the following vote . , Ayes : Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays : None 208 Item 9c RESOLUTION NO 68-96 RESOLUTION TO AWARD BID TO BIG D LINING SYSTEMS FOR SANITARY LANDFILL CELL XII CONSTRUCTION Moved by Councilor Johnston that Resolution No. 69-96 be passed. Motion seconded by Councilor Hawkins and carried by the following vote . Ayes : Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays : None Item 10a RESOLUTION NO 6 -96 RESOLUTION TO ACCEPT LAKE ARROWHEAD BY-PASS SWITCH PROJECT AS COMPLETE AND AUTHORIZE FINAL PAYMENT TO THE CONTRACTOR Moved by Councilor Shine that Resolution No. 70-96 be passed. Motion seconded by Councilor Johnston and carried by the following vote . Ayes : Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays : None Item 10b RESOLUTION NO 70-96 RESOLUTION AUTHORIZING CHANGE ORDER NO. 2 TO A CONTRACT WITH B. W. STRAYHORN FOR DEMOLITION WORK OF THE SOUTH SITE CONSTRUCTION PROJECT FOR THE MULTI-PURPOSE EVENTS CENTER Moved by Councilor Martin that Resolution No. 71-96 be passed. Motion seconded by Councilor Shine and carried by the following vote . Ayes : Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays : None 209 Item 10c RESOLUTION NO. 71-96 RESOLUTION AUTHORIZING CHANGE ORDER NO. 4 TO A CONTRACT WITH ELECTRA CONSTRUCTION COMPANY, INC. FOR THE GENERAL CONSTRUCTION OF THE EXHIBIT HALL OF THE MULTI-PURPOSE EVENTS CENTER Moved by Councilor Martin that Resolution No. 72-96 be passed. Motion seconded by Councilor Johnston and carried by the following vote . Ayes : Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays : None Item 10d RESOLUTION NO, 72-96 RESOLUTION AUTHORIZING CHANGE ORDER NO. 1 TO A CONTRACT WITH MCGRATH BROTHERS CONCRETE FOR CONCRETE PAVING FOR THE SOUTH SITE OF THE MULTI-PURPOSE EVENTS CENTER Moved by Councilor Martin that Resolution No. 73-96 be passed. Motion seconded by Councilor Johnston and carried by the following vote . Ayes : Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays : None Item 10e RESOLUTION NO, 73-96 RESOLUTION TO ACCEPT THE SPUDDER PARK RECREATIONAL COURT (CDBG) PROJECT AND AUTHORIZE FINAL PAYMENT TO M&F LITTEKEN COMPANY Moved by Councilor Thompson that Resolution No. 74-96 be wow passed. Motion seconded by Councilor Shine . Councilor Hawkins asked if we had gone over the completion date . Mr. Bonnett replied that we had, significantly. We have reached an impasse with the construction firm. Their completion date was January 1, 1996 , and we bent the rules as far as we could and gave them a twenty day extension. However, we are recommending to you that they be charged 55 days of liquidated damages at $240/day. 210 Item 10e cont' d. Mayor asked if a date of substantial completion had been established and Mr. Bonnett replied that they were recommending March 15, 1996 . There were 60 days of no activity by the contractor where work could have been done . The contractor is in agreement with the completion date but not with the liquidated damages . Councilor Daniel asked if there has actually been a financial loss in this case since it is a recreational area. Mr. Bonnett replied that liquidated damages by the nature of the definition the cost does not have to be substantiated; the specifications assume the damage . Nevertheless, we have experienced some cost which is normally related to the inspection required and continued monitoring of the project . City Manager commented that if cities do not enforce these sort of things, their contracts get put on the back burner. They will get the contracts with the city; but the feeling becomes that, politically, they do not have to deliver. You will go through a period when nothing will be done on the projects . Councilor Hawkins stated that this is CDBG money and we can be held accountable to the federal government . City Manager added that there was also the lost use of the facility which could have been a viable asset to have in the inventory. Councilor Thompson pointed out that the implications could be very serious when people look at the location and ask why liquidated damages were not accepted there and you would in other places . Mr. Bonnett stated that as part of the bidding process, for fairness, we emphasize that liquidated damages are an element of the contract . We do that as a standard format in our pre-construction/pre-bidding meeting, so other bidders bid it with this time frame. I think in the sense of fairness it is important that we uniformly and even-handedly enforce our liquidated damages process . Councilor Daniel asked what avenues are open to the contractor if he feels that he is legitimately claiming lost days . Mr. Bonnett responded that the contractor' s avenue would be to provide justification to them. Kevin Darnell, 1804 E. Scott, contractor, stated that the main disagreement he had with the damages was the amount . He explained what had transpired during the inspection. He felt that February 9, 1996 was the substantial completion date since they had an inspection and a City representative was present . They agreed to a twenty day extension. We made every effort possible to complete the job. I feel we were penalized for something that was beyond our control, referring to the compression struts, which he said was a manufacturing problem. The struts should have been brought up much earlier in the process . I believe we had some liability here, however, I think the amount is excessive . Mr. Bill Parker, City Engineer, explained what the situation was and stated that he had gone back to the diary of the project manager and inspector and nothing stated that the project was acceptable, nor substantially complete . Therefore, we did not consider it substantially complete . Three days later the compression struts were found to be put in incorrectly. He stated that the completion date would be March 15, 1996 . There was additional discussion on the inspection, the substantial completion date, the compression struts and the liquidated damage . 211 Item 10e cont' d. Claude Foster, 4932 Bayberry, expressed safety concerns about the facility since the NAACP was holding a function there . City Manager stated that this facility had been fully scrutinized and every measure had been taken to assure its safety. Mayor referred to the MPEC and commented that there were routine inspections and the City would not accept it until they felt it was complete . Mr. Bonnett added that there was no question of safety of the facility M• and there should be no concerns as to the safety. Moved by Councilor Martin to amend the original motion by decreasing the liquidated damages to $6, 600 , which would be half of the $13 , 300 which the City was asking. Councilor Daniel asked Mr. Bonnett if he had negotiated as much as he could. Mr. Bonnett replied that he gave nineteen days trying to work a settlement, and that was a reach already. We feel we have gone as far as we can, however, it is Council' s decision. Councilor Johnston stated that they had gone over the reason for the damages and felt there was no justification to extend that . The City needs to have enforced liquidated damages in all contracts because if we don' t the City' s work will suffer, both in timeliness and in the ability of persons to use those facilities . Councilor Daniel agreed and stated that we have to rely on the Staff to manage the City and make these decisions . Councilor Johnston commented that there should have been written communication in order to avoid misunderstandings . Motion to amend original motion was seconded by Councilor *+r Shine . He stated that he was concerned with the lack of communication on the completion date . Referring to the compression struts, he commented that they were under warranty and could have been done later. Councilor Hawkins stated that there was a difference of $8 , 400, in that Mr. Darnell, Contractor, has agreed that he owes $4 , 000 and the City is asking for $13 , 200 . The difference of $8 , 400 is what should be negotiated. Further discussion ensued on the substantial completion date and the negotiation figures . Mayor restated the motion on the floor which was to amend the original motion by decreasing the liquidated damages to $6 , 600 . Motion failed by the following vote . Ayes : Councilors Martin and Shine Nays : Mayor Yeager, Councilors Johnston, Thompson, Daniel and Hawkins Moved by Councilor Hawkins to amend the original motion by decreasing the liquidated damages to $9, 000 . Motion seconded by Councilor Daniel and carried by the following vote . Ayes : Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays : None 212 Item 10e cont' d. Council and Staff reassured the public that the structure is safe . Item lla Arnold Oliver, 2407 Lou Lane, Chair of Clean Community Commission informed that this commission has been discussing the possibility of asking the City to apply for membership in the Tree City U. S .A. . He provided information and requirements to the Council on this . City Manager stated that he was not against this but urged the Council to take a long hard look at it . Claude Foster, 4932 Bayberry, followed-up his proposal to the Council in April for their support on Affirmative Action of the City' s Affirmative Action Plan. He read his re-drafted version of his original proposal . Mr. Foster recommended that City consider this resolution and make it a part of the Affirmative Action Plan. Other recommendations which he requested that the Council consider are that the Council reaffirm commitment to goals and objectives of Affirmative Action Plan; that City Manager update all portions of the City' s Affirmative Action Plan; that persons responsible for implementing the Plan be held accountable for their efforts in monitoring and revising employment practices; that a copy of Affirmative Action resolution be posted in all City departments; and that periodic public briefings be held to inform the public of City' s progress in reaching affirmative action goals . Councilor Daniel asked Mr. Foster if he was asking Council to reaffirm its commitment to the existing plan. Mr. Foster responded that the City needs to get more aggressive with the implementation of the Affirmative Action Plan. Councilor Thompson commented that the City has not made much or any progress in placing minorities in management positions . Councilor Martin stated that the City has an aggressive affirmative action plan and the problem is that the high ranking positions are not vacated very often. When vacancies do come open, they are advertised but before they can be filled persons have to be qualified to fill those positions . Mayor suggested that this be discussed at the Council retreat and that the areas of concern be discussed individually with Mr. Foster. City Manager stated that when we have this discussion we need to consider the obstacles and hurdles and the efforts which have taken place . We need to look at all the impediments . Mr. Foster asked that we take a good look at how we are actually doing and not just at statistical information. Mayor concluded by stating that Council will take a look at this plan during the retreat . Councilor Thompson asked for input from the Human Needs Commission. Councilor Daniel brought up the need for Council action on the proposed resolution from Mr. Foster. Mayor directed Staff to review the re-drafted resolution for legal purposes and for Council consideration at their next meeting. 213 Item llb Councilor Shine said there was a lot of concern regarding mowing right-of-way on Fairway from Kell to Seymour Highway. This needs to be cleared up as to whether the City mows it or not since the City had mowed it for such a long time and then discontinued it . Councilor Martin invited citizens to contact Council with any items or suggestions for Council to discuss at the retreat . Councilor Daniel gave an update on the Library Committee . The Architect has been contacted to proceed with the design phase of the Library Project . The Architect was going to initiate the design, develop some more detailed schematics and provide a refined budget to the Committee . The Committee and Staff will meet on June 20 to review the schematics and refined budget; next our Committee will make a recommendation to the Council at the first Council meeting in July for a Library Project and cost . Councilor Daniel expressed appreciation to the infrastructure Committee for their efforts and time and their expertise . Councilor Daniel mentioned the MPEC quarterly reports and asked that they be more timely, thirty days after the quarter ends . Councilor Hawkins stated that the MPEC Board had been appointed for a three year term and it needs to be brought up to date . City Attorney will look into this . Councilor Hawkins asked for the outside agency appointment to replace Councilor Daniel . Lastly, Councilor Hawkins asked to meet with City Manager to discuss the gate which was taken down at Lake Kickapoo. Item llc City Manager informed he had a letter from Mr. Lavonne Bell in response to TRN editorial redirecting the use of lottery money. He passed out copies of the Parks Survey. Mr. Murphy informed that a survey was done by M. S .U. to obtain citizens input on combined city needs by providing dollar amount as to what it would cost per home owner. The number one response was police and fire training. The least was the golf course landscaping. Mr. Murphy commented that it was information for Council to look at . Mayor thanked the Staff members who took her on tours and explained their departments to her. It has been a very informative process . Item lld City Council went into executive session at 11 : 30 a.m. as authorized by Section 551 . 074 of the Government Code, and reconvened at 12 : 27 p.m. . 214 Item lle Moved by Councilor Thompson to reappoint Jerry Reed to the Nortex 9-1-1 Communication District Board with term to expire May 15, 2000 . Motion seconded by Councilor Martin and carried by the following vote . f Ayes : Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, and Martin Nays : Councilor Hawkins Item llf Moved by Councilor Thompson that Robin Thompson-Scales and Greg Muehlberger be appointed to the Wichita Falls Art Commission with terms to expire March 31, 1997 . Motion seconded by Councilor Hawkins and carried by the following vote . Ayes : Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays : None Item llg Moved by Councilor Thompson to appoint Earl Wallace Rooks and to reappoint Joseph Johnson, R.J. Wachsman, Marie Morgan and W.O. Franklin to the Planning and Zoning Commission with terms to expire May 31, 1998 . Ms . Morgan will be Alternate No. 1 and Mr. Franklin will be Alternate No. 2 . Motion seconded by Councilor Hawkins and carried by the following vote . Ayes : Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nay: None Item llh Moved by Councilor Thompson to appoint Nedra Palmer, Bettye Hansen, Lynn Hoggard, John Vitek, Sam Graham, and to reappoint Michael Maloney, Don Henschel, Jeanne Kay Rigg, and Cynthia D. Brock to the Wichita Falls Museum and Art Center Board of Directors with terms to expire April 30, 1998 . Motion seconded by Councilor Hawkins and carried by the following vote . Ayes : Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins 215 Item llh cont' d. Nays : None Item 11i Mayor addressed plans for the Council retreat . Council set the date for the retreat as June 26-28, 1996 . Mayor asked for input on obtaining an outside facilitator. Council members agreed that a facilitator was necessary. Mayor stated that this is a Council retreat and asked that Council be very active in the planning and any items which need to be addressed to bring them forward. She invited Council to participate and sit in on any planning meetings . Councilor Thompson hoped that it would be ideas and things we want to see done instead of problems that would be discussed. Such categories as human relations, infrastructure development should be addressed and where we want to go in five, ten years . Councilor Daniel asked that recycling be addressed at the retreat and what our approach would be in five years . Mayor said we need to set some goals and priorities for the City, and Staff can come up with ways to implement those through the budgeting process . We need to provide the leadership and move forward. Councilor Hawkins stated that we need to look at each individual segment under each director. Councilor Thompson suggested that directors project what we would be looking at five, ten, twenty years from now. Councilor Shine suggested projecting in five years . Councilor Thompson suggested using the different committees and getting their input also. Councilor Johnston added that we should do some long-term planning as to where we want to carry this City in the next ten, fifteen years . Mayor will be in touch with Council as planning progresses . The City Council adjourned at 12 : 27 p.m. PASSED AND APPROVED this day of 19 �. KATHRY A. YEAGE , MA R ATTEST: 4�Lyd!" orres Cit !Clerk May 16 , 1996 TO: Honorable Mayor and City Councilors ' tea FROM: Citizen' s Advisory Committee on Infrastructure and Economic Development Needs S-30rc�o Chair : Paul Hughes Vice-Chairperson: " Gail Natale Subcommittee Chairpersons_ Arnold Oliver, Public Works John Wellsfry, Administrative and Finance Munir Lalani, Police and Fire Dee Ann Martin, Parks Steve Morath, Economic Development Committee Members : Ray Roberts Bobby Schaaf Jack Bock Dan Davis Betty Butler Joe Johnson Charles Thomas Rebecca Lanmon W,C, young Guillermo Garcia Rev. Judge Smith Ramon Benevides Otis Polk, III Johnny Burns Aw The Committee was given two major purposes . First, the committee was asked to examine the physical infrastructure of the City and determine the overall needs and opportunities for improvement . Their study should include Capital Improvement needs for the next five to ten year pers on which ojects sd and ered and hownthosenimprovementsr should should be considered funded. cons Second, the committee was asked to examine opportunities and potentials (methods?) to enhance the economic development and job creation capabilities in the public and private agencies of the area and make specific recommendations on programs and funding methods to accomplish these goals . We began meeting on Thursday, January 25th and have met approximately twelve times as a committee of the whole, plus several meetings for each subcommittee over a span of over three months . We have received input from City staff, citizens and third parties, including citizens and staffs of INFRASTRUCTURE COMMITTEE REPORT CITY COUNCIL MINUTES Page 1 MAY 21 , 1996 cent sales and use tax under Section 4A of the State Development Corporation Act with the required wording on the ballot to be as follows : "The adoption of a sales and use tax for the promotion and development of new and expanded business enterprises at the rate of one-half of one percent and the adoption of an additional sales and use tax within the City at a rate of one-half of one percent to be used to reduce the property tax rate . " The voters then vote for or against the proposition that will add one cent to the local sales and use tax. We discussed putting a time limit, but according to the office of The Attorney General ' s Handbook, once such a limit is approved by the voters, the City may not ask the voters to later reimpose or extend the Section 4A tax. The law requires that a five member Board of Directors be appointed by the City Council to administer the sales tax funds . In order for this new industrial development sales tax to work and be the positive force for improvement that it is envisioned to be, it is mandatory that mismanagement, misappropriation and inexperience not be permitted to come into being. The City Council has a serious responsibility in appointing only those individuals to the Board of Directors who meet the highest of standards . Even with the most qualified Board of Directors, it will be a difficult task to make certain that the taxpayers receive the benefit intended from this new sales tax. Attachment 11F1" attempts to enumerate those qualities desired for the Board members . We strongly recommend that the Board of Directors not include any of the City Council or City staff . It should not be necessary because Section 21 of the Development Corporation Act provides that the City shall approve all programs and expenditures of the development corporation and shall annually review any financial statements of the corporation. It further provides that at all times the City will have access to the books and records of the corporation. A logical question that many people will be asking is, "Who will the City Council appoint to this Board of Directors"? If there is too much concern for that question, it could jeopardize the election. Therefore, identifying the five member board nominees before the election merits serious consideration. For more detail refer to Attachment "G" . We recommend this approach for several reasons . Here are a few: 1 . The reduction in the city' s property tax rate by approximately 25% should benefit every citizen and business Page 4 in Wichita Falls . If you rent, city property taxes are considered by your landlord when computing rent increases . According to a report given to our committee, attachment 11H11 , approximately one-third of the sales and use tax revenues would be paid by non-resident visitors to our city. This is an excellent method to receive revenue from those who use our police, fire (including first responder units) , streets, parks, and other services and facilities paid for by the citizens of Wichita Falls . 2 . The city has also proven its reluctance to raise property taxes unnecessarily if you review the past ten years . For example, from fiscal year 1985-86 to fiscal year 1994-95 the city tax rate has increased 6 . 35%, while the Wichita Falls Independent School District tax rate has increased 54% and Wichita County' s tax rate has increased So% in the same ten year period. The city budget would benefit from those expenditures fromcoming currenttcity economic operating development fund as opposed funds (see attachment I for more detail) . The county and school district budgets would also benefit from the increase in the tax base generated by the economic development dollars . Also, surrounding cities which benefit from Wichita Falls industrial development would be contributing to the revenue as their citizens shopped and visited our city. 3 . Under Section 4A, the corporation and its five member board of directors are subject to the Open Meetings Act and the Open Records Act . 4 . Section 4A has more restrictions on the types of projects which are acceptable job creation and developments . Also by calling an election the citizens have the ability to decrease or abolish the tax by a vote . 5 . By having a dedicated fund for industrial development , we will have the financial resources to compete for new and expanding industry thereby insuring the future growth of Wichita Falls and the growth of our tax base . The growth of our tax base will assist in minimizing tax rate increases, not only for the city, but for the school district and the county. 6 . Out of the 266 Texas cities with Section 4A or 4B, only one City will have a significant dollar advantage over Wichita Falls in the economic development arena. 7 . By receiving more revenue from sales tax and less from property taxes, elderly persons and those with lower and fixed incomes will benefit greater by having a choice regarding their taxes and because the increase will not affect rent, certain food items, prescription drugs, doctor' s charges, labor for plumbers, electricians, painters Page 5 and other home repairs . Also it should be noted that automobiles are not subject to local sales tax. Summary—, *Recommend City Council calls for election to be held in August 1996 to increase the sales tax by one cent . *If approved, use 1/2 cent which generates approximately $4 to $4 . 5 million to reduce the City property tax rate approximately 25% . (Reduces taxes on a $25 , 000 house approximately $42, a $50 , 000 house approximately $84 , etc . ) *If approved, collection of 1/2 cent for property tax reduction would begin October 1, 1997 and apply to 1997 property tax statement . Summary--Economic Development : *If approved, use 1/2 cent which generates approximately $4 to $4 . 5 million for Section 4A sales and use tax for the promotion and development of new and expanding business enterprises to increase the tax base and revenues of the City, County and School District . *If approved, collection of the 1/2 cent for economic development would begin January 1, 1997 . Summary Infrastructure and Capital Improvement : *Follow the same process on future capital projects and infrastructure as was used for the library. *Currently the City contributes funds to economic development projects out of its reserves/equity fund. With the additional revenue available from sales tax for economic development, use the resulting savings to assist in funding needed capital projects and infrastructure. *Pass on added operating expenses mandated by the voters so the needed funds for capital projects and infrastructure can be budgeted annually. We would also like to encourage citizens and groups who agree with the direction of this report to take the lead in educating the public so the citizens of Wichita Falls may make an informed decision. Again, we would like to thank all those who assisted us and thank the City Council for your confidence in us, and for giving us this opportunity to serve our city and its citizens . We hope our efforts will be useful and would be glad to answer any questions that we can. Page 6 Attachment "A" ARNOLD W. OLIVER 2407 Lou Lane Wichita Falls,Tx.76308-3907 (S 17)691-7539 March 26, 1996 TO: Mr Paul Hughes, Chairman Citizens Advisory Committee on Infrastructure FROM: Arnold W Oliver, Chairman Subcommitte for Public Works and Transportation This Subcommittee met on March 25, 1996 at 1:00 PM in the office of Public Works Director George Bonnett. All members of the subcommittee were present along with Transportation Director Bob Parker and Public Works Director, George Bonnett. The meeting concluded at 4:45 PM. The committee recommends to the committee as a whole the following projects be included in any program of work to be proposed. CALLFIELD RELEIVER ROAD - This project is a high priority of the subcommittee for the increased efficiency of traffic movement, congestion relief and the ben- efits that will accrue in the form of increased tax base, sales tax receipts, etc from development that will occur as a result of this improvement. There is a possibility of Federal funding through the State Department of Transporta- tion but due to time restraints the committee feels that in the interest of time that this should be a city funded project and we recommend the full amount of $2,969,000. LOOP 11 EXTENSION FROM US 287 NORTH TO AIRPORT DRIVE AND EASTWARD TO IH 44 &- SPUR 325 This project will provide a direct connection from the Sheppard AFB area to Loop 11 and will also enhance some promising commercial development in the northwest quadrant of the US 287/IH 44 interchange. Cost $2,025,900. AUSTIN STREET STORM SEWER - This sewer was built in the early part of the cen- tury and is in critical condition and on life support. It has failed in several places. It is in such condition that city workers are not permitted to enter it to make repairs. Repairs must be made by open trench which usually is done in the street and disrupts business as well as traffic. The cost of repairs to this 72 inch sewer must come out of street repairs which means that fewer streets get repaired. Repairs usally are not compatible with the require- ments of a replacement sewer which means that when the project is rebuilt, the interim repairs and their cost will be lost. Cost $1,014,400. LONGVIEW DRAINAGE DPROVEMENT - This project will improve the drainage from Longview and Mustang to Plum Creek. This is a development induced problem which causes flooding in several houses several times each year. This is a relatively low cost project with great cost effectiveness. The cost of buyout of these houses would exceed the cost of the project and be politically unpopular. Al- though many drainage projects were considered in depth, this one probably has the greatest immediate impact on homes which flood. Cost $92,000 DUNCAN STREET FLOOD PUMPS - This project would provide automated flood gates to prevent backup flooding from the Wichita River and provide pumps to alleviate flooding which might occur from rains behind the gates when the gates are in place. Flooding from this situation floods some homes and renders several streets unusable during flooding in the eastside of the city. Cost $440,000 ®LIVER 2407 Lou Lane Wichita Falls,Tx.76308-3907 (817)691-7539 Page 2 Subcommittee on Public Works Report These 5 projects comprise a total cost of $6,540,900 of a possible total of $16,497,300 (Public Works plus Traffic and Transportation) of projects from the master list furnished by city staff. Although the committee agreed not to prioritize. the projects, the listing probably accurately reflects the importance in which the committee places on these projects and feel that they are the minimum we should recommend from the area of public works. Although the Chair could garner absolutely zero support for the project from other members of the subcommittee, he would like to express to the committee of the whole his sincere belief that the time of citizens of Wichita Falls is as valuable as that of citizens of other cities. In that vein, and only as an individual member of larger committee, that the $175,000 for traffic signal upgrades be considered for inclusion. While we sit at intersections waiting for lights to change controlled by antiquated fixed-time controllers, citizens of other cities with far worse congestion problems are being moved along with timely, efficient, state-of-the-art signal systems. In terms of lost productivity, this would be a very, very cost effective project. In viewing some of our infrastructure needs, and with the caveat that Wichita Falls is a good place to live, I am reminded of the old proverb which says: "Patch by patch is good husbandry; but patch upon patch is plain beggary." End o report a d respectfully submitted. o W iv Attachment 'B" REPORT FROM THE ADMINISTRATIVE SERVICES SUBCOMMITTEE GROUPING OF NOTES FROM MEETING 3/27/96 1. The Subcommittee met on 3/27/96 at 8:30 am. In attendance were Jack Bock and John Wellsfiy. All others had other pending business. As this is not a suggested report from the Subcommittee(in that only two of the five were present), I am taking the liberty to paraphrase our meeting with Jim Dockery (Asst City Mgr), Jan Strickland (Personnel Mgr), Fred Warner(Finance), David Goodrich(Asst Personnel), and Delbert Gayles (Bldg Maintenance). 2. Jun Dockery a. Began our meeting discussing Library, Golf Course and Computer. Although he did not make a prioritized listing of these, it was apparent that CoMput ,g were considered highly, as the city has already spent 1.1 million of the 2 million, and still needs another 600,000 - 900,000 to have a very good system. The current system is utilizing hardware from the mid 80s (although they do have a new mainframe), however, the software is 60s vintage and being supported in house, as the vendors no longer support it. b. The Library will be discussed more in detail over the next few weeks at the City Council. However, the recommendation from the Committee studying this area is going to suggest a move from the present 19,000 square foot facility to the lower floor of the Activities Center (61,000 square feet). The price tag - almost 4 million dollars (as opposed to the 2.2 million indicated). C. The Golf Course. This facility is contracted out. The contract spells out annual improvements in the range of $15,000. All else is maintenance to keep it "as is." I would suggest that this was third in his area, as you could spend $100,000 - $2,000,000 and.most likely not see a significant noticeable difference. Most of this $500,000 recommendation was to add additional trees and improve drainage/land around 15& - 17s` fairways/greens. This affects few members of the city, and probably could be best spent elsewhere. 2. Jan Striddand. a. She has prioritized the latter areas as follows: 1. Tornado Sirens. 2. Memorial Auditorium Heating/Air Conditioning. 3. Roof Replacements. 4, Steps/Sidewalks. 5. Memorial Auditorium Escape. Admin Services/Finance Sub.Report 1 6. Martin Luther King Remodel. 7. Auditorium Lighting. b. Tornac o Sirens. All sirens are operational. However, some are 20 and other even 40 years old. Parts is a problem. Therefore over the next 5 years they are tooling to replace many of them, and they are currently replacing 5 ($120,000). Therefore the total amount needed is about $500,000. This would be to provide better coverage, and to cover areas where they do not have as good of coverage as desired. C. Memorial Auditorium. Need to replace current Absorber (1963 model), with two absorbers ($500,000) plus piping with ($150,000). This will have to be replaced - most likely within the next 2-3 years, however it could happen much sooner if it goes down. The efficiency would be greater and the facility would be easier to maintain. d. Roof Replacements. The following facilities need new roofs: Lucy Park Bathhouse, fire stations (Central, 5, 7, 3, 4, 9), Health Department, and Airport (cannot utilize airport funds for this), Central Services. They all need them and need to be done. e. Steps/Sidewalks. Pot marks, and cracks need to be fixed. f. Memorial Auditorium Escape. ADA requires escape abilities for Disabled. Therefore ramps for all floors are necessary. Rather than slides, they are looking at chair lifts. g. MLK Center. Remodel complete. However need to seal the entire exterior(windows and bricks)to keep moisture out. h. Auditorium Li ti g. Old as building. Should be upgraded. 3. Fred Warner a. Utift Collection Drive In Facility. Want to place drive-up window with a pneumatic .tube, new speaker and revamp the exit. This is to improve primarily the quality of life for the employees.as they have to breathe vchq t fumes. 4. GENERAL COMMENTS. a. It is very apparent that there are needs for maintenance of the facilities.we already have. Unfortunately, there is no area within the budget whereby they fund Capital Improvements. This is improper at the city manager/city council level. With a budget of roughly $40 million, there \Q A&Wn Services 1PIncnce Sub.Report 2 should be a set aside amount of at least $1 million annually for capital improvements (and that is on the minimum side). This is not to be ` dedicated to any specific project - rather it should serve as an aid to depreciating property to keep it in shape. b. The Library will be a LARGE project. A total faceliivremodel of the Activities center will occur, as will changes to the exterior (landscaping/parking). C. '/2 cent sales tax increase will provide the city roughly $3-4 million/year. It would seem appropriate to set aside a minimum of $2 million to upgrade the facilities we currently have. d. The golf course improvement is probably a waste with the current contract that exists. Adman Services/Finance Sub.Report 3 STAFF SUGGESTED CAPITAL IMPROVEMENTS Admin Services and Finance Revised Admin Services Library Relocation and renovation of the library facility in the $4,000,000 first floor of the current activities center. Golf Course Tree Plantings, irrigation to bare areas, water hazards, $500,000 Improvements soil, sod and seed. Computer System Completion of system improvements $750,000 Tornado Sirens Five year plan to replace sirens and reduce from 51 to $440,000 28 (cost of five=$120,000) Memorial Auditorium Replace Heating and Cooling system of Auditorium $1,000,000 Heating/AC (probably done for $750,000) Roof Replacements Replace Lucy Park Bath House,Fire Stations $925,000+consulting (Central, 5, 7, 3, 4, 9), Health Dept, Airport, Central fee Services Steps/Sidewalks Replace Steps/Sidewalks around city hall, and Health $125,000 Unit and Police Station Memorial Auditorium ADA required. Chair Lift for upper floors $110,000 Escape MLK Ctr Remodel Most done. Just need to seal outside BrickiVindows $202000 Auditorium Lighting Upgrade fighting/electronics that are as old as $200,000 building. FINANCE Utility Collection Drive Pneumatic Tube/Improve Speaker System/Revamp $50,000 in Facility Exit Adman Services/Finance Sub.Report 4 Attachment "C" 10 April 1996 TO: Paul Hughes, Chairman Citizen Advisory Committee on Infrastucture and Economic Development FROM: Munir A. Lalani, Chairman Police/ Fire Sub-Committee The sub-committee, after meeting with both the Fire Chief on March 27 and Police Chief and his aide on April 1, met again on April 10th among ourselves and are making the following recommendations: 1. To replace the City's Communication System with one that complies with recent FCC Strategy as well as help ensure safety for citizens in crisis such as tornados, etc. We further recommend that the City Council use the services of consultant in order to determine the best and most affordable system that will continue to address the changing needs of the City and its various departments. We recommend $4,5000,000/= approximate for this project. 2. Separate Training Centers: The committee recommends building or,acquiring existing buildings near the Police Station and the#1 Fire Station for the purpose of classroom instructions and training. The committee also recommends building a new firing range across from the present firing range site and a new storage facility or rehabilitating the present facility near the Burn building. The committee recommends total of$2,500,000/= approximate budget for the above projects with specifics to be worked out by the City Manager's Office. 3. Fire Station#5: Committee recommends this project at a reduced budget of$250,000/=. 4. Aerial Truck: Committee recommends providing funds for the purchase of an Aerial truck at a reduced budget of$500,000/=. The committee basically rejected the idea for consolidation of fire stations 3 &4 and 7 &9 as well as funds for the rehabilitation for#8. The committee further recommends that the re-modeling of fire station 1 &2 as well as the purchase of commercial fire engines should be part of the annual operating budget. The total cost of all the above recommendations come to $7,750,000/= approx. versus $12,082,000/= approx. as presented in the staff proposal of October 1995. The majority of the sub-committee members agreed that 1/2 cent sales tax will be the best way to raise the funding for the recommended projects. Mr. W. C. Young dissented, (Mr. Young would like to see a full 1 cent sales tax,with 1/2 cent for infrastructure, 1/4 cent for economic development and 1/4 cent for reducing the property taxes.). Attachment "D" DEEANN MARTIN 4245 KEMP BOULEVARD, STE 900 WICHITA FALLS, TEXAS, 76308-2830 MEMO TO: PAUL HUGHES FROM: DEEANN MARTIN SUBJECT: PARKS SUB-COMMITTEE REPORT DATE : MAY 10 , 1996 THE PARKS SUB-, COMMITTEE MET WITH THE FOLLOWING MEMBERS PRESENT; REV. SMITH, MR. BURNS AND MRS . MARTIN. STAFF WAS REPRESENTED BY JACK MURPHY, PARKS DIRECTOR. THE COMMITTEE REVIEWED THE ENCLOSED PARKS AND RECREATION DEPARTMENT NEEDS LIST AND FELT THAT ALL THE NEEDS HAD SOME MERIT. LAKE WICHITA WAS A PRIORITY WITH THE MEMBERS PRESENT. IT WAS THE FEELING OF THIS GROUP THAT THE LAKE WICHITA DEVELOPMENT WOULD BE A BENEFIT FOR ALL CITIZENS OF WICHITA FALLS . THE ECONOMIC IMPACT WITH THE DEVELOPMENT OF THIS AREA COULD BE VERY POSITIVE. MEMBERS PRESENT ALSO ENCOURAGED THE PARKS DIRECTOR AND CITY COUNCIL TO WORK TO DEVELOP GRANTS AND MATCHING FUNDING FOR THIS PURPOSE. THE PLAN FOR THE SUB-COMMITTEE TO MEET AND PRIORITIZE OTHER PROJECTS WAS DROPPED. THIS WAS AFTER THE STRAW VOTE WAS TAKEN BY THE INFRASTRUCTURE COMMITTEE TO SUPPORT 4A. Parks and Recreation 1996 C . I .P . Projects General _Park_1mPrQ.vtn_e..n_ta $1 ,697 ,000 . - Lighting and 911 telephones $ 75 ,000 . - Picnic shelters 180 ,000 . ( 5 ) small ( 2 ) large - Restroom on I .S .T .E .A . trail 75 ,000 . - Modern playgrounds ( 5 ) 200 ,000 . J .C . , Weeks , Edgemere , Hamilton , Sunset Terrace - Picnic benches 100 70 ,000 . - Irrigation 30 acres 180 ,000 . Lucy , I .S .T .E .A . trail , parks - Ponds with edging 300 ,000 . Wood , Expressway , Loch Lomand , Kiwanis , Weeks , Hamilton - Drinking fountains , ( 10 ) 17 ,000 . - Trails 4 .6 miles x 8 ' 600 ,000 . Kiwanis 1 .1 , Hamilton .5 , Loch Lomand .5 , Expressway .5 , Sunset Terrace .5 , Hursh .5 , Southern Hills .5 , Plum Lake .5 f3 15?1lSgjlt&r iwanis Par k $3,000 ,000 . - 40 ,000 sq . f t . - Class rooms , game rooms , ( 2 ) gymnasia - Senior citizen activities , dances , leagues , classes , special events . L,�?e llichi a Shoreline Improvements $1 ,230 ,000 . - Boat ramp/pier ( assumes $ 50 ,000 . grant from T P & W) - Rental bldg ./pavilion by spillway 200 ,000 . - Trail in J .C . 1 .5 mile 225 ,000 . - Restaurant by spillway 250 ,000 . ( operated by private sector ) - Tram ride on trails 110 ,000 . around lake and Holliday Creek - J .C . paved road and parking 200 ,000 . to beach areas - Restroom in J .C . beach area 75 ,000 . - Irrigation along lake 90 ,000. trail and J .C . beach area 15 acres - Sand Volleyball courts 30 ,000 . J .C . beach area Botanical Center Hamilton or Lucv Park $ 310 ,000 . - Small room for classes/rentals $ 40 ,000 . - Tropical conservatory 200 ,000 . - Walkways 20 ,000 . - Flower and plant displays 50 ,000 . �i kes La Dredging $ 750 ,000 . $6 ,987 ,000 . Attachment "E" ECONOMIC DEVELOPMENT SUBCOMMITTEE REPORT The purpose of the subcommittee is to explore in more detail the opportunities to enhance the economic development and job creation capabilities of the area. The subcommittee met with Ron Mertens, President/CEO of the Board of Commerce & Industry (BCI), on Tuesday, March 26 at 1:00 p.m.. Subcommittee members present included Chairman Steve Morath,Paul Hughes, Arnold Oliver, Rev. Judge Smith, Bob Schaaf, and Gail Natale. Munir Lalani was not present. The initial discussion centered on the sales tax and how it can be used to enhance economic development activities. Ron informed the subcommittee that the BCI has yet to establish a formal position on the sales tax issue. However, the BCI executive committee would like to meet with the Citizen's Advisory Committee to discuss this subject when funding options are examined. Speaking from his own perspective, Ron favors the sales tax under 4B because of its flexibility for infrastructure projects and economic development activities. Ron was asked to provide a priority list of projects/program areas that would enhance the economic development and job creation capabilities of the area. They are as follow: 1. Dependable Source of Funds for Financial Incentives for New and Expanding Businesses (Suggested Amount: $2 million) -- BCI is dependent upon private sector contributions for packaging their incentives, excluding public infrastructure. In the last three years, it has spent about$1.5 million for incentives. A substantial increase is expected if sales tax funds are available for this purpose. 2. New Industrial Park Including Land, 3 Spec Buildings (25,000/50,000/100,000 sq. ft.), and Infrastructure Improvements (Suggested Amount: $3 million) -- There are no available industrial buildings to market to prospective industries in Wichita Falls, only industrial property remaining in the two industrial parks. 3. Marketing & Promotional Activities (No Suggested Amount) -- If sales tax funds are available for incentives,the BCI can devote more of their budget to this area. No marketing trips, trade shows, or other activities are conducted because of budgetary limitations. 4. Workforce Training(No Suggested Amount) -- Funds amounting to about $500,000 have been expended in this area over the last three years to purchase equipment and other items required for training semiskilled entry workers. It is an area that continues to demand more attention because of the area's low unemployment rate and lack of available skilled labor required by local manufacturers. Respectfully Submitted, aV_ Mm� Steve Morath 1 Attachment 'IF" Budget 1991-92 1992-93 1994-95 1994-95 1995-96 Police 290, 000 290, 000 290, 000 290, 000 290, 000 Election 484, 000 484 , 000 484 , 000 484, 000 242 , 000 242 , 000 242, 000 Fire Fighter 37,915 454, 991 Election 290, 000 774 , 000 1, 016, 000 1, 053 , 915 1, 470,991 In August 1990, the citizens of Wichita Falls voted to mandate minimum staffing levels for the Police Department. The proposition that was approved required the City to add 6 officers in 1991-92 , 10 officers in 1992-93 , and 5 officers in 1993-94 , bringing the minimum staffing level to 180 commissioned police officers. The approximate cost per police officer is $48,400 which includes salary and benefits, uniforms, equipment, training, etc. In August 1995, the citizens of Wichita Falls voted to increase the base pay for fire fighters. The results of that election took effect September 1, 1995 . $ . O1 on the tax rate generates approximately $247 , 392 . It would take approximately $. 06 added to current tax rate to generate approximate revenue to cover above fire and police mandates by the citizens. "attachment F1" BOARD OF DIRECTORS QUALIFICATIONS 1. Experience a. Background in a significant business environment that has involved creating jobs, expanding, financing, evaluating risks and opportunities, etc. b. Understands the responsibilities of serving in a fiduciary capacity. C. Background of borrowing and repaying large sums of money. d. Experienced in industrial recruitment. e. Understands the necessity of good accounting procedures and demands the same. f. Adept at reading and understanding financial information. 2. Integrity a. Unquestioned honesty. b. Demonstrated dependability. C. Unblemished record. d. Ability to make decisions so that the city's good name and image are projected. 3. Creativity/Insight a. Can entertain novel ideas while staying in touch with reality. b. Ability to recognize positive attributes of proposals. C. Ability to detect inappropriate schemes. d. Drive to find a way to close a deal when it has been determined to be in the best interest of the city. e. Cautious, but capable of being a risk taker. 4. Organ izational/Management Ability a. Good communicator. b. Ability to disagree agreeably. C. Can change viewpoint with changing conditions. d. Fosters enlightened debate in a group. e. Welcomes talented people to work with. 5. Community Orientation a. Has community activity background. b. Has a understanding of existing industry in the city as well as type of new industry our citizens would support. C. Desire to see real growth in the city. 6. Independent a. Must not be a "political" appointment. b. Must have a desire to serve the community. C. Must be free to act according to dictates of his/her conscience. Attachment "G" THE ATTORNEY LL O- Z U �' Ar- DANm X u". D o MORALES The Attorney General's HANDBOOK ON ECONOMIC DEVELOPMENT LAWS FOR TEXAS CITIES How To Utilize Existing Statutory Tools to Promote Local Economic Development Dan Morales, Texas Attorney General The Attorney General's Municipal Advisory Committee i. The Sales Tax for Economic Development Using Sales Tax to Promote Economic Development The sales tax for economic development has been one of the most popular and effective tools used by cities to promote economic development. Although authorization for the local option tax has been in effect only since 1989, over 265 cities have levied an economic development sales tax. The cities which have adopted this tax have cumulatively raised in excess of$135 million dollars annually in additional sales tax revenue dedicated to the promotion of local economic development. Of these cities, 124 adopted a Section 4A economic development sales tax, 118 cities have adopted a Section 4B economic development sales tax, and 23 cities have adopted both a Section 4A and a Section 4B sales tax. History of the Economic Development Sales Tax Although legislators have always understood the need to promote economic development, prior to 1979 there were few statutory vehicles that facilitated such efforts. Business leaders expressed this concern to the Texas Legislature and asked for authorization to create an entity that could encourage the development of new local commerce. In response, the Texas Legislature passed the Development Corporation Act of 1979 (Article 5190.6). The Development Corporation Act (DCA) allows municipalities to create nonprofit corporations (called development corporations) that promote the creation of new and expanded industry and manufacturing activity within the municipality. The development corporations operate separately from the municipalities, with boards of directors that oversee their efforts. These corporations, in conjunction with industrial foundations and other private entities, work to promote local business development. However, prior to 1987, the efforts of these entities were dependent on funding from private sources, which often was difficult to obtain. At that time, development corporations could not legally receive funding from the state or local governments because of a Texas constitutional prohibition against the expenditure of public funds to promote private business. In November of 1987, the voters of Texas approved an amendment to the Texas Constitution which provided that expenditures for economic development serve a public purpose and were therefore permitted under Texas law. This amendment, Article 3, Section 52-a, stated in pertinent part: Notwithstanding any other provision of this constitution, the legislature may provide for the creation of programs and the malting of loans and grants of public money . . . for the public purposes of development and diversification of the economy of the state. . . Because of this constitutional amendment, the Texas Legislature was able to pass laws that would allow state and local government funds to be used to promote economic development. Office of the Attorney General *>>»Page 2 1. The Sales Tax for Economic Development Accordingly, the 1989 and subsequent legislative sessions produced a plethora of new laws granting economic development authority to municipalities. Most notably, in 1989, the Texas Legislature amended the Development Corporation Act by adding Section 4A, which allowed the creation of a new type of development corporation. The legislation provided that a Section 4A development corporation could be funded by the imposition of a local sales and use tax dedicated to economic development. The tax could be levied only after its approval by the voters of the city at an election on the issue. The proceeds of the Section 4A sales tax were dedicated by statute to economic development projects to promote new and expanded industrial and manufacturing activities. This authority became popularly referred to as the Section 4A economic development sales tax. The Section 4A tax was generally available to cities that were located within a county of under 500,000 and had room within the local sales tax cap to adopt an additional one-half cent. Between 1989 and 1991, 31 cities adopted the Section 4A sales tax for economic development. In 1991, the Texas Legislature made a number of changes to the Section 4A sales tax authorization. It allowed the tax to be adopted at any rate between one-eighth and one-half of one percent (in one-eighth percent increments). It additionally allowed the city to offer a joint proposition to be voted on that would authorize both a Section 4A economic development sales tax and a sales tax for property tax relief. Also in the 1991 legislative session, the legislature authorized a new type of sales tax, a Section 4B sales tax. This legislation authorized a one-half cent sales tax to be used by certain cities to promote a wide range of civic and commercial projects. The legislation authorized 73 Texas cities to propose a Section 4B sales tax. Between 1991 and 1993, 19 cities adopted the new Section 4B sales tax. The popularity of the Section 4B sales tax led the Texas Legislature in 1993 to broaden its availability to any city that was eligible to adopt a Section 4A sales tax. In other words, most cities in a county of under 500,000 could adopt the Section 4B sales tax if they had room in their local sales tax. Only cities within El Paso County and Travis County are currently ineligible by statute to adopt either the Section 4A or the Section 4B tax. As of this publication, there are over 265 cities that have either a Section 4A or a Section 4B sales tax for economic development. How Texas Cities Have Used the Sales Tax for Economic Development A survey performed by Bill R. Shelton of The Cornerstone Group and published in the Texas Town & City Magazine indicated a number of ways in which Texas cities were expending the proceeds from their sales tax for economic development. Business Attraction: advertising, promotion, image marketing, marketing contracts with chambers of commerce or industrial foundations, target marketing, marketing studies, travel and related expenses, trade show participation, highway signs and billboards, direct mail, newsletters, video brochures. Office of the Attorney General vvvPage 3 A I. The Sales Tax for Economic Development Incentives to Businesses: revolving loan funds, loan guarantees, loan or interest forgiveness or write-down, business incubator programs and enterprise zone establishment, capital grants, relocation and moving expense grants, rent subsidies, sales tax rebates, incentives for prison or correctional facilities, grants for land purchase, operating costs grants, equipment purchase grants, loan guarantee to state programs, subordinate loans to financial institutions. Land and Building Purchase, Lease, and Upgrade: land purchases for industrial parks, building purchases for business incubators and/or day care centers, land for correctional facilities, infrastructural upgrades or placements, access upgrades or placements, land to expand airports, expansions and upgrades of existing buildings, construction of buildings, land purchase for resale or lease, construction of speculative buildings. Infrastructural Upgrade and Placement: rail spurs for industry, water and sewer line extensions to industrial parks, drainage projects, odor control projects, engineering and construction of needed bridges. Training and Education:job training geared for specific companies, building state technical colleges, purchasing computer equipment for vocational training programs, seeking JTPA supplemental funding, alerting prospects of small business development centers and work force development resources. i i office of the Attorney General »»-Page 4 a 1.The Sales Tax for Economic Development The Section 4A Sales Tax Eligibility to Adopt a Section 4A Tax A city is eligible to adopt the Section 4A tax, with voter approval, if the new combined local sales tax rate would not exceed two percent and: • the city is located in a county with a population of under 500,000; or • the city has a population of less than 50,000 and is located within two or more counties, one of which is Bexar, Dallas, El Paso, Harris, Tarrant or Travis County; or • the city is under 50,000 population and is within the San Antonio or Dallas Rapid Transit Authority territorial limits, but has not elected to become part of the transit authority. If a city is not certain whether it fits into one of the above categories, the city may call the Local Assistance Section of the State Comptroller's Office at (800) 531-5441, ext. 3-4679 for a confirmation of its eligibility. If a city is eligible to adopt a Section 4A tax, it may propose a tax rate equal to one-eighth, one-fourth, three-eighths, or one-half of one percent. The city may not adopt a sales tax rate that would result in a combined rate of all local sales taxes that would exceed two percent. Cities That Have Adopted a Section 4A Tax Abilene Center Graham Little Elm Overton Seven Points Allen Childress Hamlin Littlefield Palacios Shamrock Amarillo Coleman Harlingen Llano Palmview Silsbee Anson Commerce Haskell Longview Pampa Snyder Athens Copperas Hempstead Marble Falls Panhandle Sour Lake Baird Cove Henderson Marshall Paris S. Padre 1. Bellmead Crockett Hereford Maud Penitas Stamford Belton Crowell Hidalgo McKinney Perryton Sulphur Big Spring Cuney Hillsboro Meadows Pharr Springs Booker Dalhart Hooks Melissa Progreso Sweetwater Borger Decatur Jasper Memphis Prosper Taylor Brady De Kalb Kaufman Menard Quanah Terrell Breckenridge Early Kemah Mercedes Ranger Texas City Bridgeport Eastland Kilgore Mt. Pleasant Rtrynio Xmfie Tolar Brownfield Edinburg Kountz Muleshoe Red Oak Vernon Brownsville El Campo La Marque Munday Richmond Wellington Brownwood Fairfield Lamesa Nash Rio Grande Weslaco Burnet Ft. Stockton Levelland New Boston Rotan W. Tawakoni Cameron Gilmer Lindale North Lake Rusk Wills Point Canadian Gladewater Linden Olney Seguin Office of the Attorney General -*,>,>Page 5 • I.The Sales Tax for Economic Development Section 4A Tax Expenditures Section 4A tax proceeds may be used to fund any of eight types of expenditures under the Development Corporation Act. Two of the categories are pursuant to authorization under Section 4A of the Act. Under Section 4A, the Act specifically allows industrial development corporations to undertake projects, the primary purpose of which is to provide: 1) Business airports (a general aviation business service airport which is an integral part of an industrial park). 2) Port-related facilities (port-related facilities to support water-borne commerce). The remaining six categories for expenditure of Section 4A tax proceeds are pursuant to authorization within the definition of the term "project" under Section 2(10) of the Act. Section 2(10) specifically allows expenditures for land, buildings, facilities, and improvements that are suitable to promote the following six types of enterprises: 3) Manufacturing and industrial facilities. The primary purpose of the Section 4A sales tax for economic development is to promote the expansion and development of manufacturing and industrial facilities. There is no definition under the Act, however, of what constitutes a manufacturing or industrial facility. The Attorney General has ruled in Attorney General Opinion DM-80 (1991) that a for-profit hospital was not considered a "manufacturing or industrial facility" that could be funded with Section 4A tax proceeds. It may be advisable for cities to limit the use of Section 4A tax proceeds to manufacturing or industrial facilities that can show some type of tangible product that is produced for sale or resale. 4) Recycling facilities. With the recent federal and state statutory encouragement of recycling enterprises, a growing number of businesses are emerging to meet these needs, and cities will be competing to attract these businesses. 5) Distribution centers. In cities with access to major airports or ports, and in areas which have passed Freeport exemptions for qualified business properties, the environment is often favorable for the location of distribution centers. 6) Small warehouse facilities (capable of serving as decentralized storage and distribution centers). Again, in cities with access to major airports or ports, and in areas which have passed Freeport exemptions for qualified business properties, the environment is favorable for the location of warehouse facilities. 7) EN*Mrise zone projects (any project designated as an enterprise zone project pursuant to the Enterprise Zone Act, Government Code Chapter 2303). 8) Related facilities (any facilities related to any of the foregoing, whether in existence or to be constructed). Section 23 (a) (1) of the Development Corporation Act provides that an economic development corporation may undertake projects outside of the city limits with permission of the governing body that has jurisdiction over the property. The language of the Development Corporation Act, however, does not seem to require this approval if the project is located at Office of the Attorney General w­>Page 6 1. The Sales Tax for Economic Development least partially within the boundaries of the city. In other words, if the city wants to undertake a project that is located completely in the city's extraterritorial jurisdiction or beyond, it should get approval from the county commissioner's court. If the project is located within the jurisdiction of another municipality, the city would need approval of the city council for that municipality. Use of Section 4A Tax Proceeds to Promote Commercial Business Activity The legislative history of the Section 4A economic development sales tax suggests that the tax was primarily intended to promote economic development by assisting new and expanding industrial and manufacturing enterprises. There are some legal analysts, however,.who argue that the term "project" in Section 2(10) also allows the funding of projects suitable for the "promotion of commercial development and expansion." This argument is based on the definition of the term"project" in Section 2(10) which allows expenditures for land, buildings, facilities, equipment, and improvements to promote commercial development or expansion within four types of areas: 1) blighted or economically depressed areas; 2) development areas, 3) certain federally assisted new communities; or 4) certain federally designated economically depressed counties. The term "blighted or economically depressed area" is defined in Section 2(10) to include those areas which the city finds at a public hearing will substantially impair the city's growth. In its findings, the city must cite the existence of one of the following: a substantial number of substandard, slum, or deteriorating structures; a relatively high rate of unemployment; or a designation of the area as a tax increment district. The Texas Department of Commerce is responsible for adopting guidelines that describe what areas may be considered as blighted or economically depressed. An interested community should contact the Department of Commerce for a copy of the guidelines. Section 2(10) of the Act also defines the term"development area." A development area is any area that, after conducting a public hearing, the city feels "should be developed in order to meet the development objectives of the city." Some cities in Texas have held the required public hearings and designated areas as"development areas." By making such a designation, a city is able to expend Section 4A tax proceeds within the designated area to promote commercial businesses that are not industrial or manufacturing entities. The legality of expending Section 4A tax proceeds for commercial entities has not been reviewed by Texas courts or by the Office of the Attorney General. Accordingly, any such practice should be pursued with advice of local legal counsel. Use of a Section 4A Tax for Infrastructural Improvements Section 4A tax proceeds are not intended to fund the general infrastructural needs of a city. For example, Section 4A(i) of the Act states that Section 4A tax proceeds cannot be used to undertake a project, the primary purpose of which is to provide transportation facilities, solid office of the Attorney General y-*>>Page 7 1. The Sales Tax for Economic Development waste disposal facilities, or air or water pollution control facilities. Section 4A(i) further states that Section 4A tax proceeds may be used for these types of facilities only if the expenditure would"benefit property acquired for another primary purpose." Therefore, the Act envisions a situation in which specific infrastructural improvements might be necessary to allow a particular manufacturer or business to locate at a site. For instance, an industry could ask the development corporation, to fund improvements to a road that runs from the industrial facility to the main thoroughfare, or to fund solid waste or pollution control measures which may need to be included if the industry or manufacturer is going to expand at a particular site. In these situations, the expenditures are not made for general city infrastructural purposes, but are made to "benefit property acquired for another primary purpose." Prior to 1993, Section 4A of the Act contained specific authorization for Section 4A tax proceeds to be used to fund facilities for the furnishing of water to the general public. The Texas Legislature removed this authority from Section 4A in 1993. Although the definition of the term "project" in Section 2(10) still includes a reference to facilities for the furnishing of water to the general public, it is clear that the Legislature did not intend that general water facilities be funded by the use of Section 4A tax proceeds. If an improvement to the water system is geared simply to serve a particular industrial or manufacturing entity, however, the expenditure may be permissible. Other Limitations on the Use of Section 4A Tax Proceeds Cities often understand what general categories are available for expenditures. They additionally need to know what types of specific expenditures are contemplated within each category. For assistance in understanding what is permitted under the Act, cities should review the definition of the term "cost" under Section 2(4) of the Act. Section 2(4) defines what costs may be applied to a project under the Development Corporation Act. It states, in pertinent part, that costs for a project may include: a) Land and facility improvements: the cost of acquisition, construction, improvement, and expansion of land and buildings. b) Machinery and supplies: the cost of all machinery, equipment, inventory, raw materials and supplies. c) Fhumcial transaction costs: the cost of financing charges, interest prior to and during construction, and necessary reserve funds. d) Planning costs: the cost of research and development, legal services, development of plans and specifications, surveys, and cost estimates; and other expenses necessary or incident to determining the feasibility and practicability of undertaking the project. office of the Attornev General y-o-Page 8 I. The Sales Tax for Economic Development Administrative Expenses of a Section 4A Project Section 2(4) of the Act also states that the cost of a project may include the administrative expenses and other expenses that are incident to placing the project into operation. The law states that these expenses could include "the administrative expenses for the acquisition, construction, improvement, and financing of any project." It is this authority that may be cited for the hiring of administrative staff to implement the work of the development corporation with regard to its projects. Cities that perform some of the administrative functions for the corporation could also be reimbursed for administrative costs related to projects that they oversee. Additionally, Section 4A(b)(1) specifically permits a Section 4A corporation to contract with other private corporations to carry out industrial development programs. Limits on Promotional Expenses and Prior Debts Section 4A(b)(1) limits Section 4A corporations to spending no more than 10 percent of the corporate revenues (Section 4A tax proceeds) for promotional purposes. The Act does not define the term "promotional purposes." It would appear reasonable to include expenditures for advertising, attendance at trade shows, and the costs of other promotional events or efforts within the 10 percent "promotions" limit. The Act, however, appears to distinguish between administrative expenses, for which there is no maximum level for expenditure, and promotional expenses, which are limited to no more than 10 percent of should bee revenues.considered If a there is some question as to whether a particular expenditure promotional or an administrative expense, the development corporation should consult with its local legal counsel. A Section 4A development corporation is prohibited from assuming a debt or paying the principal or interest on a debt, if the debt existed before the date when the city created the development corporation. This prohibition is contained in Section 4A(q) of the Act. Issuance of Bonds for a Section 4A Project A Section 4A development corporation may issue bonds, notes, and other contractual obligations to fund its projects. The sales tax proceeds received by the corporation may be used to pay the principal and interest on the bonds and any other costs related to the bonds. For example, the Attorney General bonds in Utter for the start-upinion 92-86 that a p costs of atechnical ollegenf he development corporation may finance funds are used solely for vocational training purposes. Any bond or debt instrument of the corporation remains an obligation of the corporation and is neither an obligation of the city nor backed by the city ad valorem tax rate. Initiating an Election to Adopt a Section 4A Sales Tax An election to adopt a Section 4A economic development sales tax may be initiated by either: office of the Attorney General --Page 9 I. The Sales Tax for Economic Development • city council approval of an ordinance calling for an election on the imposition of the tax; or • a petition signed by a number of qualified voters that equals at least 20 percent of the voters who voted in the most recent regular city election. If the city council receives such a petition, it is required to pass an ordinance to call an election on the imposition of the tax. Most cities simply pass the ordinance calling for a Section 4A sales tax election on their own motion, and do not wait for the election to be initiated by a petition of the voters. If a city orders an election on the sales tax for economic development, it must follow all applicable requirements for special elections contained in the Texas Election Code, Municipal Sales and Use Tax Act (Chapter 321 of the Texas Tax Code), and other Texas statutes relating to elections. Notably, the following requirements must be followed: 1. The election must be held on a uniform election date as provided by Chapter 41 of the Election Code. These dates include: a) the third Saturday in January; b) the first Saturday in May; c) the second Saturday in August; d) the first Tuesday after the first Monday in November(this date is available only in odd-numbered years for cities). 2. The city should order the election at least 45 days prior to the date of the election. The Tax Code requires only that the city order the election at least 30 days before the date of the election. Nonetheless, it is advisable to provide at least 45 days' notice, since this is the requirement applicable to most other special elections in Texas, and it allows time to comply with other Election Code requirements, such as early voting. Additionally, the special election must be submitted for"preclearance" to the U.S. Department of Justice. 3. The city must publish notice of the election at least once in a newspaper of general circulation in the city. The notice must be published not more than 30 days and not less than 10 days before the date of the election. The notice must state the nature and date of the election, the location of each polling place, hours that the polls will be open, and any other early voting and election-related information required by law. The notice must also include the wording of all the ballot propositions. The entire notice must generally be provided in both English and Spanish. 4. The city is prohibited from expending public funds or public resources to influence the results of an election, commonly referred to as"electioneering." A city may publish fact sheets to inform the public of the applicable statistics and proposed plans for the use of the tax; however, city stationery, city funds, and city staff(during the work day) may not be used to urge the public to vote one way or the other. 5. The city must follow all other procedural requirements under the Election Code for special elections. For further information about the requirements contained in the Election Code, contact the Secretary of State's Office, Elections Division, at (800) 252-8683. For further Office of the Attorney General --Page 10 1. The Sales Tax for Economic Development information about the prohibition against expenditure of public funds to influence the results of an election, contact the Texas Ethics Commission at (800) 325-8506. There is statutorily required wording for a Section 4A sales tax proposition ballot. The wording that must be used is as follows: "The adoption of a sales and use tax for the promotion and development of new and expanded business enterprises at the rate of (insert one-eighth, one-fourth, three-eighths, or one-half, as appropriate)of one percent." The actual wording used on the ballot must indicate what rate is proposed for the Section 4A sales tax. The voters then vote for or against the proposition. Setting a Limited Time Period for a Section 4A Tax A Section 4A tax that is approved without a time limit is effective until repealed by election. However, a city may include in the wording of the.ballot proposition a limitation on the length of time in years that a Section 4A tax may be imposed. For example, a city could limit to four years the time period during which a Section 4A tax is imposed. But once such a limit is approved by the voters, the city may not ask the voters to later reimpose or extend the Section 4A tax. To date, only one city (Pampa, Texas) has included a time limit for a Section 4A tax in its ballot wording. If a city decides to include such a time limitation, the required ballot wording is as follows: "The adoption of a sales and use tax for the promotion and development of new and expanded business enterprises at the rate of (insert one-eighth, one-fourth, three-eighths, or one-half, as appropriate) of one percent to be imposed for(insert number of years that the tax would be imposed)years." for the The actual wording used on the ballot must indicate wwhat in effect. The voters then voteSection for or sales tax and the number of years that the tax ould be against the proposition. Limiting the Types of Projects for a Section 4A Tax On a ballot to adopt the Section 4A tax or on a ballot to increase or reduce a Section 4A tax, a city may also limit the use of the tax to a specific project. For example, a city could limit the use of the Section 4A tax to a project for a specific manufacturing entity or to a specific type of project such as expenditures for an industrial park. If such a limit is approved by the voters, the city may not on its own motion broaden the purposes for which the Section 4A tax may be used. Any desired change would have to go back to the voters for approval at an election on the issue. Once the obligations for the specific project have been satisfied, the corporation is required to notify the State Comptroller to cease collecting the Section 4A tax. To date, no city has limitated the use of a section 4A tax to a specific project. If a city decides to include such a limitation, the required wording of the ballot is as follows: office of the Attorney General -*-**Page 1 1.The Sales Tax for Economic Development "The adoption of a sales and use tax for the promotion and development of(insert description of the project) at the rate of (insert one-eighth, one-fourth, three- eighths, or one-half, as appropriate) of one percent." The actual wording used on the ballot must indicate what rate is proposed for the Section 4A sales tax and must include a description of the project. The voters then vote for or against the proposition. Joint Proposition for a Section 4A Tax and a Sales Tax for Property Tax Relief A city may include the Section 4A sales tax and the sales tax for property tax relief as separate ballot propositions at the same election. In 1991, the Texas Legislature additionally authorized cities to offer the voters a joint ballot propositions this scenario, the a sales tax for votes would voroperty tax lte for ef and Section 4A sales tax for economic development against one ballot proposition that covers the adoption of both taxes. This joint ballot proposition has been very popularbecause less joins opularesales tax for popular ectonomic sales tax to reduce the property tax with the sometimesP development. Under this joint ballot proposition, 4Aters salesre not able to tax for econosiicsdeve opment the property tax relief sales tax without also passing the Section Either both taxes pass or both taxes fail. Some communities Section 4A sales tax fo�economic the int ballot proposition was instrumental in their ability p development. If a city decides to use such a joint proposition, the required wording on the ballot is as follows: "The adoption of a sales and use tax for the promotion and development of new and expanded business enterprises at the rate of (insert one-eighth, one-fourth, three-eighths, or one-half, as appropriate) of one percent and the adoption of an additional sales and use tax within the city at a rate of (insert one-eighth, one- fourth, three-eighths, or one-half, as appropriate) of one percent to be used to reduce the property tax rate." The actual wording used on the ballot must indicate what rate is proposed reef r,Ithe e voters then sales tax and what rate is proposed for the sales tax for property vote for or against the proposition. There is nothing that stops a city from using separate ballot items for the passage of a sales tax for property tax relief and a Section 4A sales of each of the two economic taxespand the pament. In ssagesof for the voters would vote for or against the adoptionreferred one would not influence the passage of the other. Cities, however, have historically p the incentive value of joining the two items onto one ballot proposition. Proposition to Increase or Reduce a Section 4A Tax n mtion to A city that has imposed a Section 4A tax on its 4A °� rateayThe� election for an ewould be approve an increase or a reduction of the Section office of the Attorney General »y-opage 12 1.The Sales Tax for Economic Development administered by the same procedure that was used to originally adopt the tax. The Section 4A tax rate would be reduced or increased if the proposition was approved by a majority vote of the qualified voters of the city voting at an election called and held on the issue. The rate may be reduced or increased in one or more increments of one-eighth of one percent with a minimum rate of one-eighth of one percent and a maximum rate of one-half of one percent. On petition of at least 10 percent of the registered voters of the city, the city may be compelled to order an election on a proposed increase or decrease of the Section 4A tax rate. It should be noted that the Attorney General has ruled in Attorney General Opinion DM-137 (1992) that if there is an election to reduce the Section 4A sales tax or to limit the length of time of its collection, the reduction or limitation may not be applied to any bonds issued prior to the date of the election. It is not clear what ballot wording would be required for a proposition to increase or reduce a Section 4A tax rate. Section 4A(o) states that "the ballot shall be printed in the same manner as the ballot under Subsection (m) of this section." Subsection (m) contains the regular wording on the ballot to adopt a Section 4A sales tax. A city should consult with its local legal counsel, in conjunction with the Local Assistance Section of the Comptroller's Office, if it decides to ask the voters to reduce or increase an existing Section 4A tax. Proposition to Abolish the Section 4A Tax On petition of 10 percent or more of the registered voters of the city, the city can be required to order an election on the dissolution of the Section 4A corporation. If the corporation is dissolved, the Section 4A tax may not be collected except to pay off any remaining obligations that were executed before the date of the election. The governing body of the city is required to order an election within 45 days after such a petition is filed. The ballot for the election shall be printed to provide for voting for or against the proposition: "Dissolution of the (insert name of the corporation)." The election must be held on a uniform election date and the election is subject to all requirements under law for special elections. If a majority of the voters voting on the issue approve the dissolution, the corporation continues its operations only long enough to pay off any bonds that were issued before the date of the election and to the extent necessary to dispose of its assets. The assets are used to pay off any liabilities; any remaining assets are transferred to the city. The corporation is required to notify the State Comptroller to cease collection of the tax once the corporation has satisfied all of its obligations. Reporting Election Results of a Section 4A Tax The Election Code requires that, no earlier than the second day and no later than the sixth day after the election, the governing body of the city must canvass the ballots and enter the resolution or ordinance declaring the results of the election into the minutes of a meeting. The resolution or ordinance must include the following: office of the Attorney General *--Page 13 1.The Sales Tax for Economic Development 1. The date of the election; 2. The proposition on which the vote was held; 3. The total number of votes cast for and against the proposition; and 4. The number of votes by which the proposition was approved. If the proposed change in the tax rate is approved by a majority of the qualified voters of the city voting at an election on the issue, the city may levy the approved tax. The city secretary must, by certified or registered mail, send the State Comptroller a certified copy of the resolution or ordinance and must include a map of the city clearly showing the city's boundaries. After receiving the documents, the Comptroller has 30 days to notify the city secretary that the Comptroller's Office will administer the tax. If the election fails, the city must wait one full year before bringing the issue to the voters again. However, the Election Code allows the city to hold a subsequent election on the corresponding uniform election date that occurs approximately one year later, even if the date falls several days before a full year has elapsed. Effective Date of Section 4A Tax The change in the sales tax rate becomes effective one full calendar quarter after notice of the election has been provided to the State Comptroller. The new tax rate applies to purchases on or after the first day of that calendar quarter-as provided under Section 321.102(a) of the Tax Code. January Election: Send notice to the Comptroller no later than the last week in March. On July 1, the new tax rate will take effect. The city will receive its first payment in September. May Election: Send notice to the Comptroller no later than the last week in June. On October 1, the new tax rate will take effect. The city will receive its first payment in December. August Election: Send notice to the will Comptroller tak effect- The city will rece the last eve its ek in September. On January 1, the new tax rate first payment in March. November Election (odd-numbered years): Send notice to the Comptroller no later than the last week in December. On April 1, the new tax rate will take effect. The city will receive its first payment in June. If the city passes an election for a Section 4A sales tax and, at the same election, adopts a sales tax for property tax relief, the city has two options with regard to the effective date of the tax. The city may opt to have the taxes take effect at the same time (the following October 1 if a full calendar quarter has passed since the election).calendar quartVeer, the city may had passed after se to have the Section 4A tax take effect as soon a one election, and have the sales tax for property tax relief take effect the following October 1 (after which a full calendar quarter had passed since she�election).� ta relief scenario, the Some cction ities 4A tax would generally take effect before the sale property office of the Attorney General 3.,yxpage 14 I. The Sales Tax for Economic Development choose this option to maximize revenues from the tax; other cities choose to make it easier on retailers and allow both taxes to take effect at the same time in October. Allocation of the Sales Tax Proceeds by the Comptroller Once the sales tax is effective, the Comptroller remits the sales tax proceeds from the increase in the rate to the municipality with its other local sales tax proceeds. The Municipal Sales and Use Tax Act (Chapter 321 of the Tax Code) governs the imposition, computation, administration, abolition, and use of the tax except where it is inconsistent with the Development Corporation Act. The city, upon receiving its local sales tax allotment from the Comptroller, must remit the sales tax for economic development to the industrial development corporation responsible for administering the tax. However, the proceeds of a sales tax for property tax relief would remain with the city. Creating a Section 4A Industrial Development Corporation A Section 4A development corporation may be initiated either by the city or by a group of citizens. In either case, the development corporation must be created by a group of at least three persons who are at least 18 years old and qualified voters of the city. The group must file a written application with the city requesting approval of an industrial development corporation. The city may not charge a fee for consideration of the application. If the city determines that the corporation should be created, the city must approve the corporation's articles of incorporation by ordinance or resolution. The ordinance or resolution must indicate what purposes the corporation can further on the city's behalf. The purposes shall be limited to the promotion and development of industrial and manufacturing enterprises to promote and encourage employment and the public welfare. The articles of incorporation must state that the corporation is to be governed by Section 4A of the Act. If a city collects a sales and use tax under both Section 4A and Section 4B, the city must create separate corporations and boards of directors for Section 4A and Section 4B. However, the member of the board of directors of one corporation may serve on the board of directors of the other corporation. A city may not create more than one corporation to implement the Section 4A tax or more than one corporation to implement a Section 4B tax. A development corporation that was established prior to the passage of the Section 4A or Section 4B tax may choose to transfer all of its assets to a Section 4A or Section 4B corporation and dissolve, as provided under the Development Corporation Act. The dissolution must be approved by the city council and by the board of directors of the corporation. The articles of incorporation for all development corporations must contain the items required under Section 6 of the Act, and must be approved by the municipality's governing body. The city may amend the articles of incorporation at its sole discretion at any time. Office of the Attorney General >>-*Page IS I. The Sales Tax for Economic Development I I j The articles of incorporation must be filed in triplicate with the Secretary of State's Office pursuant to Section 7 of the Act. Upon the issuance of the certificate of incorporation, the corporate existence begins. After the issuance of the certificate of incorporation, the board of directors must hold an organizational meeting to adopt the bylaws of the corporation and to elect officers. The initial bylaws must also be approved by resolution of the governing body of the city. The first meeting of the board of directors of the corporation should be held pursuant to the requirements under Section 12 of the Act. Directors of a Section 4A Development Corporation A Section 4A corporation is governed by a five-member board of directors. The five directors are appointed by a majority vote of the city council at an open meeting. The Act does not specify any qualifying criteria for a person who serves as a director on the Section 4A Board. A Section 4A director is not requireu� be a city resident reimbursedfor arctualroperty expenses. The direer. The ctors aors re serve without compensation, but mthe directors serve at the appointed to a term not to exceed six years. However, in actuality, pleasure of the city council and may be removed by the city council at any time without cause. A majority of the board (three members) constitutes a quorum. The board of directors is subject to both the Open Meetings Act and the Open Records Act. Additionally, the Development Corporation Act requires the board to conduct all of its meetings within the city limits. At one of its first meetings, the board is required to elect a president, a secretary, and any other officers that the governing horde���t e corporation'sy considers �registered offissary. The ce must be registered agent must be a resident of within the boundaries of the city. General Powers and Duties of Section 4A Development Corporations Section 4A industrial development corporations have the following general powers and duties: 1) The development corporation has the power to expend the proceeds of the sales tax for economic development pursuant to a majority vote of the governing body of the board and pursuant to oversight by the city. 2) The corporation shall have and exercise all powers and rights of a nonprofit corporation under the Texas Nonprofit Corporation Act(Article 1396-1.01). 3) The corporation shall have the power to sell, to lease, and to make secured and unsecured loans, and to sue and be sued. 4) The corporation is a nonprofit, nonmember, nonstock corporation. ties 5) Section 4A corporations are considered of Texas Copurely nstitutiolic n pursuant° Section the tax exemption of Article VIII, Section 32 of Article 5190.6. office of the Attorney General »1► l'age 16 1. The Sales Tax for Economic Development 6) The corporation and its board of directors are subject to the Open Meetings Act and the Open Records Act. 7) The corporation may not exercise the power of eminent domain except by action of the city council. 8) The corporation and its directors and employees are not liable for damages arising out of the performance of governmental functions of the corporation. The corporation is considered a governmental entity for purposes of the Texas Tort Claims Act. 9) The corporation does not have the power to own or operate any project as a business entity other than as a lessor, seller, or lender. Oversight of a Section 4A Development Corporation Section 21 of the Development Corporation Act provides that the city shall approve all programs and expenditures of the development corporation and shall annually review any financial statements of the corporation. It further provides that at all times the city will have access to the books and records of the corporation_ Additionally, Section 23(11) of the Act states that the powers of the corporation shall be subject at all times to the control of the city's governing body. Office of the Attorney General v-**Page 17 I. The Sales Tax for Economic Development The Section 413 Sales Tax Eligibility to Adopt a Section 413 Tax A city may impose the Section 4B tax, with voter approval, if the.new combined local sales tax rate would not exceed two percent and if the city fits into one of the following categories: • the city would be eligible to adopt a Section 4A sales tax (see above); or • the city is located in a county with a population of 750,000 or more and the current combined sales tax rate does not exceed 7.25 percent at the time the Section 4B tax is proposed; or • the city is located in a county with a population of 1,000,000 and more than 40 incorporated municipalities, and the current combined sales tax rate does not exceed 7.75 percent at the time the Section 4B tax is proposed; or the city has a population of o0,000 or more and and local sales tax' rate does not exceed 8 25 cated in more than one county, and the combined state percent (no city is currently eligible under this criterion). If the city is not certain whether it fits into one of the above categories, teg ri , the city an call the for Local Assistance Section of the State Comptrollers Office at ( ) a confirmation of its eligibility. If the city is eligible to adopt a Section 4B tax, it may propose a tax rate equal to one-eighth, one-fourth, three-eighths, or one-half of one percent. The city may not adopt a sales tax rate that would result in a combined rate exceeding two percent. Cities that have Passed a Section 4B Tax Navasota Seagoville Arcola Dal. Gardens Hurst Nederland Southlake Arlington Duncanville Jacksonville Iv' Jefferson N. Richld. H. Strawn Je Aspermont Elgin Junction Oak Ridge N. Teague Bop Encina101ton Tomball Bay City Euless Keller P Tve Benbrook Forest Hill Kerrville Van Horn Forney La Joya Pearlanarland Big Sandy Lake Jackson Pittsburg Venus Brenham Franklin Port Isabel Watagua Buffalo Friona League CityW. Columbia Burleson Gainesville Liberty Portland Westlake Galveston Lorena Queen City Celeste Los Fresnos Refugio W. Settlement Celina Grd. Prairie Roma Winfield Cisco Grand Saline Magnolia Winnsboro Groom Mansfield Rosenberg Clarendon Merkel Runaway B. Clyde Gruver Sachse Conroe Henrietta Mission ome Mont San Benito Cotulla H. C. Village Montgomery Scotland Cross Plains. Hitchcock Mt. Vernon Office of the Attorney General ­v­Page 18 I. The Sales Tax for Economic Development Cities that have passed both a Section 4A & a Section 4B Tax (19) Atlanta Edcouch Knox Citv Newton Sunnyvale Cathage Elsa La Feria Seabrook Wylie Cedar Hill Frisco Lancaster Somerset Desoto Hawley N. Braunfels Sugar Land Use of Section 4B Tax Proceeds The law provides a wide variety of purposes for which Section 4B tax proceeds may be expended. Section 4B tax proceeds may be spent on land, buildings, equipment, and improvements for items that fit under the definition of"project" under Section 2(10) of the Act. The term "project" in Section 2(10) of the Development Corporation Act (V.T.C.S. Article 5190.6) encompasses manufacturing and industrial facilities, recycling facilities, distribution centers, small warehouse facilities, enterprise zone projects, and facilities related to these projects. Additionally, Section 4B specifically permits expenditures of Section 4B tax proceeds for land, buildings, equipment, and improvements suitable for the following eight types of projects: 1) Athletic facilities. Professional and amateur sports and athletics, including stadiums and ballparks. 2) Tourism and entertainment facilities. Entertainment, tourist, and convention facilities, including auditoriums, amphitheaters, concert halls, and exhibition facilities. 3) Parks and public space improvements. Projects that promote athletic or tourism related facilities or activities including; public parks, park facilities and events, open space improvements, museums, learning centers, and municipally- owned buildings. 4) Public facility improvements. Facilities such as public safety facilities, that will promote new or expanded business enterprises. 5) Commercial facilities. Related store, restaurant, concession, and parking facilities. 6) Tramportation improvements. Related streets, roads, and area transportation facilities. 7) Infrastructural improvements. Related water and sewer facilities; drainage, and demolition. However, a city is unlikely to be able to justify the use of the Section 4B tax for residential sewer improvements that are not related to a particular business entity. 8) Other business-related improvements. Any other improvements to promote new or expanded business enterprises. office of the Attorney General ­v-Page 19 1. The Sales Tax for Economic Development Section 23 (a) (1) of the Development Corporation Act provides that an economic development corporation may undertake projects outside of the city limits with permission of the governing body that has jurisdiction over the property. The language of the Development Corporation Act, however, does not seem to require this approval if the project is located at least partially within the boundaries of the city. In other words, if the city wants to undertake a project that is located completely in the city's extraterritorial jurisdiction or beyond, it should get approval from the county commissioner's court. If the project is located within the jurisdiction of another municipality, the city would need approval of the city council for that municipality. Public Notice Requirement and 60-Day Right to Petition The public has a right to gather a petition objecting to a particular Section 4B project. The petition must be submitted within 60 dayrnof etthan tenrst Puercentaof the registered notice of a �voters project of the type of project, and must be signed by P city. The petition can ask that the city hold an election on the issue before that specific project or type of project is undertaken. If the petition is submitted in a timely manner and an election is required, the corporation may not undertake the project until the voters approve the project at an election on the issue. If the voters disapprove the project at the election, the Section 4B tax proceeds may not be used for that purpose. An election is not required if the voters have previously approved the specific project or that general type of project at an earlier election called under the Development Corporation Act. Cities that know what types of projects they want to undertake may be well advised to specifically list each of these types of projects in the ballot wording when the Section 4B tax is first considered by the voters. If the city includes each of these types of projects in the original ballot proposition, it can assert that the public has already approved that type of project at a prior election. In this scenario, the city arguably would not be required to call an additional election even if a petition were submitted regarding the project. Public Hearing Requirement for Expending 4B Tax Proceeds A Section 4B corporation must hold at least one public hearing on a proposed project, including a proposal to expend funds on maintenance and operating expenses of a project. This hearing must be held before the corporation expends any funds on the project. There is nothing in the Act that prohibits the Section 4B corporation from holding one public hearing to consider a group of Section 4B projects. After the projects have been considered at a public hearing and 60 days have passed since the first publrnotice the Psuant to the jects, the development corporation is free to make expenditues related t the projects pu adopted budget. Office of the Attorney General ,,,>Page 20 1. The Sales Tax for Economic Development Costs of a Section 4B Project That May be Funded Cities often understand what general categories are available for expenditures. They additionally need to know what types of specific expenditures are contemplated within each category. For assistance in understanding what is permitted under the Act, cities should review the definition of the term "cost" under Section 2(4) of the Act. Section 2(4) of the Development Corporation Act defines what costs may be applied to a Section 4B project. It states in pertinent part that costs for a project may include: a) Land and facility improvements: the cost of acquisition, construction, improvement, and expansion of land and buildings. b) Machinery and supplies: the cost of all machinery, equipment, inventory, raw materials and supplies. c) Financial transaction costs: the cost of financing charges, interest prior to and during construction, and necessary reserve funds. d) planning costs: the cost of research and development, legal services, development of plans and specifications, surveys, and cost estimates; and other expenses necessary or incident to determining the feasibility and practicability of undertaking the project. Payment of Administrative Expenses for a Section 4B Project Section 2(4) of the Act states that the cost of a project may also include the administrative and other expenses that are incident to placing the project into operation. The law provides that these expenses could include administrative expenses for the acquisition, construction, improvement, and financing of the project. It is this authority that could be cited for the hiring of administrative staff to implement the work of the Section 4B development corporation with regard to its projects. Accordingly, cities that perform some of the administrative functions for the corporation could be reimbursed for administrative costs related to projects that they oversee. Additionally, Section 4B(a-2) states that the costs of a publicly owned and operated project may include the maintenance and operating costs for the project. The Act allows the voters to object to such an expenditure by submitting a petition of ten percent of the registered voters of the city. The public has 60 days from the date when notice is given that the tax will be used for this purpose to submit the petition. Such a petition would ask the city to hold an election to approve the payment of maintenance and operating costs for projects. An election is not required, however, if the voters had previously approved the use of Section 4B tax proceeds for this purpose at an earlier election under the Development Corporation Act. Cities that are aware that they want to use Section 4B tax proceeds to pay the maintenance and operating costs of projects would be well advised to list this type of expenditure on the ballot when the Section 4B tax is first considered by the voters. By including this provision in the original ballot proposition, the city can assert that the public has already approved this Office of the Attorney General »vvpage 21 1. The Sales Tax for Economic Development type of expenditure at a prior election. Accordingly, if the city uses such a ballot provision, it cannot be required to hold an additional election if a petition is submitted regarding these costs. Payment of Promotional Expenses and Debt Obligations A Section 4B corporation is not limited by statute regarding the percentage of its revenues that it may expend for promotional purposes. Nonetheless, it is advisable that a Section 4B corporation voluntarily limit its expenditures for promotional purposes. Limiting this type of expenditure is consistent with the express intent of the Texas Legislature that the economic development sales tax not be used primarily for promotional purposes. The Section 4B development corporation may issue bonds, notes, and other contractual obligations to fund its projects. The tax proceeds received by the Section 4B corporation may be used to pay the principal and interest on the bonds and any other related costs. The Legislature has not addressed whether a Section 4B development corporation is prohibited from paying principal or interest on a debt, if the debt existed before the date the city created the Section 4B corporation. However, a bond or debt instrument of the corporation is not an obligation of the city, nor is it backed by the city ad valorem tax rate. Initiating an Election to Approve a Section 4B Tax An election to adopt a Section 4B economic development sales tax can be initiated by city council approval of an ordinance calling for an election to impose the tax. When the city orders an election on the sales tax for economic development, it must follow all applicable requirements for special elections contained in the Texas Election Code, the Municipal Sales and Use Tax Act (Chapter 321 of the Texas Tax Code), and any other Texas statutes regarding elections. Notably, the following requirements must be followed: 1. The election must be held on a uniform election date, as provided by Chapter 41 of the Election Code. These dates include: a) the third Saturday in January, b)the first Saturday in May; c)the second Saturday in August; d)the first Tuesday after the first Monday in November(this date is available only for cities in odd-numbered years). 2. The city should order the election at least 45 days prior to the date of the election. The Tax Code requires only that the city order the election at least 30 days before the date of the election. Nonetheless, it is advisable to provide at least 45 days' notice, since this is the requirement applicable to most other special lection�Code requirements,Providing such5 as yearly notice voting allows time to comply with other E Additionally, the special election must be submitted for"preclearance" to the U.S. Department of Justice. Office of the Attorney General vv*page 22 1. The Sales Tax for Economic Development 3. The city must publish notice of the election at least once in a newspaper of general circulation in the city. The notice must be published no more than 30 days and no less than 10 days before the date of the election. The notice must state the nature and date of the election, the location of each polling place, hours that the polls will be open, and any other early voting and election-related information required by law. The notice must also include the wording of all the ballot propositions. The entire notice must generally be provided both in English and in Spanish. 4. The city is prohibited from expending public funds or public resources to influence the results of an election, commonly referred to as "electioneering." A city may publish fact sheets to inform the public of the applicable statistics and proposed plans for the use of the tax. However, city stationery, city funds, and city staff(during the work day) may not be used to urge the public to vote one way or the other. 5. The city must follow all other procedural requirements under the Election Code for special elections. For further information about the requirements contained in the Election Code, contact the Secretary of State's Office, Elections Division, at (800) 252-8683. For further information about the prohibition against expenditure of public funds to influence the results of an election, contact the Texas Ethics Commission at (800) 325-8506. Ballot for a Section 4B Tax Current law does not provide any required wording for the ballot for a Section 4B sales tax for economic development. Nonetheless, cities should use great care to include wording that describes all of the categories of projects that may be pursued by the industrial development corporation. For example, if a city includes only "the promotion of industrial and manufacturing programs and the development of city parks" in its ballot proposition, the city will be able to expend the Section 4B tax to accomplish only these two purposes. There is no statutory authorization for later broadening the purposes for which a Section 4B tax may be used. Accordingly, a city should specify each type of project authorized under Section 4B of the Act that+may be of interest to the city currently and in the future. In addition, the city should consider including a provision in the wording of the Section 4B ballot that would allow the expenditure of Section 4B tax proceeds on the "maintenance and operations expenses for any of the abovebe for the upkeep and dayrojects." Including -touch a on will of any allow the Section 4B tax proceeds to P public facilities or programs undertaken with the Section 4B tax. If a city were to include every type of project authorized under a Section 4B tax, and if it also chose to include the above wording with regard to maintenance and operations expenses, the ballot for a Section 4B tax could be worded as follows: The adoption of a Section 4B sales and use tax at the rate of(insert one-eighth, one-fourth, three-eighths, or one-half, as appropriate) of one percent to undertake projects as described in Section 4B of Article 5190.6, including but not limited to projects for the promotion of professional and amateur athletics and sports including stadiums, ball parks, auditoriums, projects related to entertainment, Office of the Attorney General >,>-page 23 1. The Sales Tax for Economic Development convention, tourist, and exhibition facilities, amphitheaters, concert halls, and public parks, park facilities and events, open space improvements, learning centers, municipal buildings, museums and related stores, restaurant, concession, and automobile parking facilities, related area transportation facilities, and related roads, streets, and water and sewer facilities, recycling facilities and projects to promote new or expanded business enterprises including public safety facilities, streets and roads, drainage, and related improvements, demolition of existing structures, and general improvements that are municipally owned, as well as any other improvements or facilities that are related to any of the above projects and any other project that the board determines will promote new or expanded business enterprises, and the maintenance and operations expenses for any of the above described projects. The actual wording used on the ballot must indicate what rate is proposed for the Section 4B sales tax. The voters then vote for or against the proposition. The wording of the above ballot incorporates all of the categories for expenditures currently provided under Section 4B of the Development Corporation Act. It also allows for the payment of maintenance and operations expenses on any of the above described projects. A city could amend the ballot wording to take out any categories that are not related to the goals the city has for its economic development program. In any case, the ballot wording must clearly indicate that the tax to be adopted is a Section 4B sales tax. Project and Time Limitations on Section 4B Ballots As noted earlier, there is no required wording for a Section 4B tax ballot. Accordingly, there is no special wording that must be used to limit the use of the Section 4B tax to certain projects. If a city wants to limit the use of Section 4B tax proceeds to certain projects, it may choose to list only the types of projects it desires on the ballot. The city should remember, however, that there is no current authorization for later expanding the purposes for which a Section 4B tax may be expended. There is no provision under the Development Corporation Act that specifically allows a Section 4B tax to be imposed for a limited time period. By its terms, the Section 4B tax ends once all bonds or other obligations of the corporation that are payable from the Section 4B tax have been paid in full. It should be noted that the law does not state when the development corporation must execute debt in order for the tax to continue, or whether the Section 4B tax may be collected if the corporation either does not execute any debt or has temporarily paid off its obligations. If a city implements a Section 4B tax, the city will want to consult its local legal counsel regarding these issues. When Separate Propositions are Required There is no authorization for a city to offer a joint ballot proposition to approve both a Section 4B sales tax and a sales tax for property tax relief. These two items may be considered at the same election, but they must be voted on individually. A city wishing to adopt both can include a ballot item to approve the Section 4B sales tax and also include a separate ballot item to approve the sales tax for property tax relief. It is possible that one, both, or neither of Office of the Attorney General >>v»page 24 1. The Sales Tax for Economic Development the taxes would be approved at such an election. In no case may a city offer ballot propositions that, if passed by the voters, would cause the city to exceed its two-percent local sales tax cap. A city may offer separate ballot propositions to reduce an existing Section 4A tax and to approve a Section 4B tax. Although the two items may be considered at the same election, they must be voted on individually. It is possible that one, both, or neither of the items would be approved at such an election. A city that chooses to provide these options to the voters would use the ballot wording suggested above for each of these items. In no case may a city offer ballot propositions that, if passed, would cause the city to exceed its two-percent local sales tax cap. Increasing or Reducing a Section 4B Tax There is no statutory authority that allows a Section 4B tax to be increased or decreased after its initial adoption. The city could use its power by resolution under Section 34 of the Act to terminate or dissolve the development corporation. If the city takes such an action, the corporation and the tax would continue only for the time period necessary to pay off any outstanding debt. There is also no authority for the voters to abolish a Section 4B tax prior to the payment of all outstanding bonds and other forms of indebtedness. However, once all of the debt is paid, the voters, through an action in district court, could seek to compel the dissolution of the corporation and a ceasing of the collection of the tax. Reporting Results of a Section 4B Tax Election The Election Code requires that, no earlier than the second day and no later than the sixth day after an election, the governing body of the city must canvass the ballots and enter the resolution or ordinance declaring the results of the election into the minutes of a meeting. The resolution or ordinance must include the following: 1. The date of the election; 2. The proposition on which the vote was held; 3. The total number of votes cast for and against the proposition; and 4. The number of votes by which the proposition was approved. If the proposed change in the tax rate is approved by a majority of the qualified voters of the city voting at an election on the issue, the city may levy the approved tax. The city secretary must, by certified or registered mail, send the State Comptroller a certified copy of the resolution or ordinance and a map of the city clearly showing the city's boundaries. After receiving the documents, the Comptroller has 30 days to notify the city secretary that the Comptroller's Office will administer the tax. Office of the Attorney General yy»Page 25 I. The Sales Tax for Economic Development If the election fails, the city must wait one full year before bringing the issue to the voters again. However, the Election Code allows the city to hold a subsequent election on the corresponding uniform election date that occurs approximately one year later, even if the date falls several days before a full year has elapsed Effective Date of Section 4B Tax The change in the sales tax rate becomes effective one full calendar quarter after notice of the election has been provided to the State Comptroller. The new tax rate applies to purchases on or after the first day of that calendar quarter as provided under Section 321.102(a) of the Tax Code. January Election: Send notice to the Comptroller no later than the last week in March. On July 1, the new tax rate will take effect. The city will receive its first payment in September. May Election: Send notice to the Comptroller no later than the last week in June. On October 1, the new tax rate will take effect. The city will receive its first payment in December. than the August Election: Send notice to t� Comptroller take effect.rThe city willsreceive its ek in September. On January 1, the ne first payment in March. November Election (odd-numbered years): Send notice to the Comptroller no later than the last week in December. On April 1, the new tax rate will take effect. The city will receive its first payment in June. If the city adopts a Section 4B sales tax, and at the same election, adopts a sales tax for property tax relief, both taxes will not take effect until the following October 1 (assuming at least a complete calendar quarter has passed since the election). If a complete calendar quarter had not passed since the election, the tax would not take effect until the following October 1. Allocation of the Sales Tax Proceeds by the Comptroller Once the sales tax is effective, the Comptroller remits the sales tax proceeds from the increase in the rate to the municipality with its other local sales tax proceeds. The Municipal Sales and Use Tax Act (Chapter 321 of the Tax Code) governs the imposition, computation, administration, and use of the tax, except where it is inconsistent with the Development Corporation Act. The city, upon receiving its local sales tax allotment from the Comptroller, must remit any sales tax for economic development to the industrial development corporation responsible for administering the tax. However, the proceeds of a sales tax for property tax relief, if adopted, would remain with the city. Office of the Attorney General y>>»page 26 I. The Sales Tax for Economic Development i Creation of a Section 413 Development Corporation A development corporation may be initiated either by the city or by a group of citizens. In either case, the development corporation must be created by a group of at least three persons who are at least 18 years old and qualified voters of the city. The group must file a written application with the city requesting approval of an industrial development corporation. The city may not charge a fee for consideration of the application. If the city determines that the corporation should be created, the city must approve the corporation's articles of incorporation by ordinance or resolution. The articles of incorporation must indicate what purposes the corporation can promote on the city's behalf. The articles of incorporation must also state that the corporation is to be governed by Section 4B of the Act. If a city collects a sales and use tax under both Section 4A and Section 4B, the city must create separate corporations and boards of directors for Section 4A and Section 4B. However, a member of the board of directors of one corporation may serve on the board of directors of the other corporation. A city may not create more than one corporation to implement the Section 4A tax or more than one corporation to implement a Section 4B tax. The articles of incorporation for all development corporations must contain the items required under Section 6 of the Act, and must be approved by the municipality's governing body. The city, at its sole discretion, may amend the articles of incorporation at any time. The articles of incorporation must be filed in triplicate with the Secretary of State's Office pursuant to Section 7 of the Act. Upon the issuance of the certificate of incorporation, the corporate existence of the development corporation begins. After the issuance of the certificate of incorporation, the board of directors of the corporation must hold an organizational meeting to adopt the bylaws and to elect officers. The initial bylaws must also be approved by resolution of the governing body of the city. The first meeting of the board of directors of the corporation should be held pursuant to the requirements of Section 12 of the Act. Directors of a Section 413 Development Corporation A Section 4B corporation is governed by a seven-member board of directors. The seven directors are appointed by a majority vote of the city council at an open meeting. Unlike Section 4A corporation boards, the Act does place qualifying criteria for a person who serves as a director on the Section 4B Board. Specifically, a Section 4B director is required to be a city resident. Additionally, the law limits the number of Section 4B directors who are also city officers or employees: it states that no more than four of the seven directors may also be elected city officials or city employees. The directors serve without compensation, but must be reimbursed for actual expenses. A director serves at the pleasure of the city council for a term of two years; however, the city council may vote to remove a director at any time without having to specify cause. A majority of the board (four members) constitutes a quorum. The industrial development corporation board of directors is subject to both the Open Meetings Act and the Open Records Act. Additionally, the Development Corporation Act requires the board to conduct Office of the Attorney General _v-Page 27 i. The Sales Tax for Economic Development all of its meetings within the city limits. At one of its first meetings, the board is required to elect a president, a secretary, and any other officers that the governing body of the city considers necessary. The corporation's registered agent must be a resident of Texas, and the corporation's registered office must be within the boundaries of the city. General Powers and Duties of Section 4B Development Corporations Section 4B industrial development corporations have the following general powers and duties: 1) The development corporation has the power to expend the proceeds of the sales tax for economic development pursuant to a majority vote of the governing body of the board and pursuant to oversight by the city. 2) The corporation shall have and exercise all powers and rights of a nonprofit corporation under the Texas Nonprofit Corporation Act (Article 1396-1.01 et seq.). 3) The corporation shall have the power to sell, to lease, to make secured and unsecured loans, and to sue and be sued. 4) The corporation is a nonprofit, nonmember, nonstock corporation. 5) Projects owned by the Section 4B corporation are exempt from property taxation under Section 11.11 of the Tax Code, pursuant to Article 5190.6, Section 4B(k). Section 4B corporations are considered purely public charities within the tax exemption of Article VHI, Section 2 of the Texas Constitution pursuant to Section 32 of Article 5190.6. 6) The corporation and its board of directors are subject to the Open Meetings Act and the Open Records Act. 7) The city council must approve the corporation's exercise of eminent domain power. When the corporation exercises eminent domain power, it must do so in accordance with the procedures set forth in the laws applicable to the eligible city. 8) The corporation and its directors and employees are not liable for damages arising out of the performance of governmental functions of the corporation. The corporation is considered a governmental entity for purposes of the Texas Tort Claims Act. 9) The corporation does not have the power to own or operate any project as a business entity other than as a lessor, seller, or lender. Oversight of Section 4B Development Corporations Section 21 of the Development Corporation Act provides that the city shall approve all programs and expenditures of the development corporation and shall annually review any office of the Attorney General yx,,>Page 28 1. The Sales Tax for Economic Development financial statements of the corporation. It further provides that at all times the city will have access to the books and records of the corporation. Additionally, Section 23(11) of the Act states that the powers of the corporation shall be subject at all times to the control of the city's governing body. Office of the Attorney General »»»Page 29 Attachment 'Till MEMORANDUM FROM SMALL BUSINESS DEVELOPMENT CENTER 3410 Taft Boulevard Wichita Falls, TX 76308 SB C (817)689-4373 FAX (817)689-4374 Date: Friday, May 3, 1996 From: Paul Cook To: Paul Hughes Re: 1(r Sales Tax Estimates There is currently no system in place to identify sales by Wichita Falls City residents and non-residents, so estimating is the best I, or anyone else can do. I estimated the per household average income ($29,669), multiplied by the number of households within the city limits (36,300), to come up with the total household spending by City residents($1,076,993,775). Using National Personal Consumption Expenditures and subtracting out expenditures for food I came up with an estimated ratio of-64.5% as the "taxable expenditures". This ratio of taxable expenditures multiplied with the total household spending by City residents gives an estimate of Total Sales by City Residents ($694,422,105). Total Sales by Residents subtracted from Total Sales in the City of WF ($1,045,451,542) gives me the estimated Sales by non-residents ($351,029,437). Bottom line, about 33.6% of sales is from non- residents. I ran my analysis by Dr. Yoshi Fukasawa and he made several suggestions which I have incorporated. In the end he feels that the numbers, "...look about right.' I have documented my sources, shown my computations, and have tried to make reasonabl sumptions. I hope this helps. I am open to your comments. Estimated 1 Q Sales Tax Revenue 5/3/96 City of Wichita Falls Notes a Persons per household 2.55 0) b Per Capita Income $11,635 0) 1 Est. Average Household Income $29,669 (#a X#b) 2 Number of Households in City Limits 36,300 '(2) 3 Est. Total Household Spending $1,076,993,775 (#1 X #2) 4 Total Retails Sales City of Wichita Falls $1,045,451,542 '(3) 5 6 National Personal Consumption Expenditures by Major Type of Product 1994 7 Total Personal Consumption Expenditures $462,800,000,000 100.0% '(4) 8 Durable Goods $59,140,000,000 12.8% '(4) 9 Nondurable Goods $139,440,000,000 30.1% '(4) 10 Expenditures on Food $67,960,000,000 14.7% '(4) 11 Services (63.5% taxable) $264,210,000,000 57.1% '(4) 12 13 Est. Taxable Personal Consumption Exp.* $298,403,350,000 64.5% (#7 -(#10+(#11 X.365))) 14 *(Less Food, Less 36.5% for none taxable Services) 15 Est. Taxable Household spending by City Residents $694,422,105 (#4 X (ratio from#12) 16 17 Retail Sales by City Residents & None Residents 18 Total Retails Sales City of Wichita Falls $1 ,045,451 ,542 100.0% (#4) 19 Est. Total Retails Sales by City Residents $694,422,105 66.4% (#14) 20 Est. Total Retail Sales by Non-Residents $351,029,437 33.6% (#18419) 21 22 Current Sales Tax Revenue 23 Est. Total Retails Sales City of Wichita Falls $7 5,7 9 5,2 3 7 (#18 X 7.25%) 24 Est. Total Retails Sales by City Residents $50,345,603 (#19 X 7.25%) 25 Est. Total Retail Sales by Non-Residents $25,449,634 (#20 X 7.25%) 26 27 Proposed Tax Revenue 28 Est. Total Retails Sales City of Wichita Falls $86,249,752 (#18 X 8.25%) 29 Est. Total Retails Sales by City Residents $5 7,2 8 9,8 2 4 (#19 X 8.2 5%) 30 Est. Total Retail Sales by Non-Residents $2 8,9 5 9,9 2 9 (#20 X 8.2 5%) 31 32 Economic Development Revenue 33 Est. Total City of Wichita Falls $10,4 5 4,51 5 100.0% (#18 X 1%) 34 Est. From City Residents $6,944,221 66.4% (#19 X 1%) 35 Est. From Non Residents $3,510,2 9 4 3 3.6% (#20 X 1%) 36 37 Additional Average. Tax per Household/year $191.30 (#34 /#2) 38 Per month $15.94 (#37/12) 39 Per Person $75.02 (#37/12) Sources: 1) County & City Data Book 1994, U.S. Department of Commerce. 2) Sales and Marketing Management "Annual Survey of Buying Power", August 1995, S & MM Magazine. 3) State Comptroller of Public Accounts, Texas, 1994 Retail Sales 4) Survey of Current Business, February 1995, U.S. Department of Commerce. 5) Consumer Expenditure Survey 1991, Bureau of Labor Statistics. Analysis by the Small Business Development Center, M.S.U., Paul Cook, 5/3/96 Impact on Households at Different Income Levels Lowest 20% Second 20% Third 20% Fourth 20% Fifth 20% Avg. Annual Expenditures (4) $13,464 $18,986 $26,144 $36,151 $57,597 Taxable Expenditures $8,681 $12,242 $16,857 $23,309 $37,137 Est. Current Sales Taxes Paid $629 $888 $1,222 $1,690 $2,692 Est. 8.25% Sales Taxes Paid $716 $1,010 $1,391 $1,923 $3,064 Additional Sales Tax Per household/year $86.81 $122.42 $168.57 $233.09 $371.37 Per household/month $7.23 $10.20 $14.05 $19.42 $30.95 Per Person/year $34.04 $48.01 $66.11 $91.41 $145.64 Per Person/month $2.84 $4.00 $5.51 $7.62 $12.14 Relative Tax Burden 1.00 1.41 1.94 2.69 4.28 Impact on Households at Different Income Levels Lowest 20% Second 20% Third 20% Fourth 20% Fifth 20% Average Annual Expenditures $13,464 $18,986 $26,144 $36,151 $57,597 Taxable Spending by Category Food Away from Home 630 1023 1405 2108 3254 Household Operations & Furnishings 873 1183 1677 2556 4482 Entertainment 586 732 1214 1876 3205 Personal Care Products 205 .295 371 496 727 Reading 70 106 152 203 309 Alcoholic Beverages 127 190 306 371 575 Tobacco Products 181 274 310 339 285 Miscellaneous 361 471 770 1080 1705 Est. Total Taxable Expenditures $3,033 $4,274 $6,205 $9,029 $14,542 Est. Current Sales Tax Paid $2 2 0 $310 $4 5 0 $6 5 5 $1 ,0 5 4 Additional Sales Tax per Year $30.33 $42.74 $62.05 $90.29 $145.42 Average Household Sales Tax--------------------------------------------------- $74.17 Per month $2.53 $3.56 $5.17 $7.52 $12.12 Relative Sales Tax Burden 1.00 1.41 2.05 2.98 4.79 Equivalent Cost Pack of cigarettes--------------- $2.53 Big Mac Value Meal-------------------------- $3.56 Bag of Cookies------------------------------------------------ $5.17 Businesslunch----------------------------------------------------------------- $7.52 Movie tickets for two------------------------------------------------------------------------ $12.12 Figures are from the 1991 Consumer Expenditure Survey, Bureau of Labor Statistics. Analysis by the Small Business Development Center, Paul Cook 5/3/96 Estimated 1 /2 a Sales Tax Revenue 1 1/1/95 City of Wichita Falls Notes a Persons per household 2.55 0) b Per Capita Income $11,635 '(1) 1 Est. Average Household Income $29,669 (#a X#b) 2 Number of Households in City Limits 36,300 '(2) 3 Est. Total Household Spending $1,076,993,775 (#1 X #2) 4 Total Retails Sales City of Wichita Falls $1,045,451,542 '(3) 5 6 National Personal Consumption Expenditures by Major Type of Product 1994 7 Total Personal Consumption Expenditures $462,800,000,000 100.0% '(4) 8 Durable Goods $59,140,000,000 12.8% '(4) 9 Nondurable Goods $139,440,000,000 30.1% '(4) 10 Expenditures on Food $67,960,000,000 14.7% '(4) 11 Services (63.5% taxable) $264,210,000,000 57.1% '(4) 12 13 Est. Taxable Personal Consumption Exp.* $298,403,350,000 64.5% (#7 -(#10+(#11 X.365))) 14 *(Less Food, Less 36.5% for none taxable Services) 15 Est. Taxable Household spending by City Residents $694,422,105 (#4 X (ratio of#12) 16 17 Retail Sales by City Residents & None Residents 18 Total Retails Sales City of Wichita Falls $1,04 5,4 51 ,5 4 2 100.0% (#4) 19 Est. Total Retails Sales by City Residents $694,422,105 66.4% (#14) 20 Est. Total Retail Sales by Non-Residents $351,029,437 33.6% (#18419) 21 22 Current Sales Tax Revenue 23 Est. Total Retails Sales City of Wichita Falls $7 5,7 9 5,2 3 7 (#18 X 7.2 5%) 24 Est. Total Retails Sales by City Residents $50,345,603 (#19 X 7.25%) 25 Est. Total Retail Sales by Non-Residents $25,449,634 (#20 X 7.25%) 26 27 Proposed Tax Revenue 28 Est. Total Retails Sales City of Wichita Falls $81 ,022,495 (#18 X 7.75%) 29 Est. Total Retails Sales by City Residents $53,817,713 (#19 X 7.75%) 30 Est. Total Retail Sales by Non-Residents $27,204,781 (#20 X 7.75%) 31 32 Economic Development Revenue 33 Est. Total City of Wichita Falls $5,2 2 7,2 5 8 100.0% (#18 X .0 5%) 34 Est. From City Residents $3,472,111 66.4% (#19 X .05%) 35 Est. From Non Residents $1,755,147 33.6% (#20 X .05%) 36 37 Additional Average. Tax per Household/year $95.65 (#34 /#2) 38 Per month $7.97 (#37/12) 39 Per Person $37.51 (#37/12) Sources: 1) County & City Data Book 1994, U.S. Department of Commerce. 2) Sales and Marketing Management "Annual Survey of Buying Power", August 1995, S & MM Magazine. 3) State Comptroller of Public Accounts, Texas, 1994 Retail Sales 4) Survey of Current Business, February 1995, U.S. Department of Commerce. 5) Consumer Expenditure Survey 1991, Bureau of Labor Statistics. Analysis by the Small Business Development Center, M.S.U., Paul Cook, 10/31/95 • Impact on Households at Different Income Levels Lowest 20% Second 20% Third 20% Fourth 20% Fifth 20% Avg. Annual Expenditures (4) $13,464 $18,986 $26,144 $36,151 $57,597 Taxable Expenditures $8,681 $12,242 $16,857 $23,309 $37,137 Est. Current Sales Taxes Paid $629 $888 $1,222 $1,690 $2,692 Est. 7.75% Sales Taxes Paid $673 $949 $1,306 $1,806 $2,878 Additional Sales Tax Per household/year $43.41 $61.21 $84.29 $116.55 $185.69 Per household/month $3.62 $5.10 $7.02 $9.71 $1 5.47 Per Person/year $17.02 $24.00 $33.05 $45.70 $72.82 Per Person/month $1.42 $2.00 $2.75 $3.81 $6.07 Relative Tax Burden 1.00 1.41 1.94 2.69 4.28 Y Impact on Households at Different Income Levels Lowest 20% Second 20% Third 20% Fourth 20% Fifth 20% Average Annual Expenditures $13,464 $18,986 $26,144 $36,151 $57,597 Taxable Spending by Category Food Away from Home 630 1023 1405 2108 3254 Household Operations & Furnishings 873 1183 1677 2556 4482 Entertainment 586 732 1214 1876 3205 Personal Care Products 205 295 371 496 727 Reading 70 106 152 203 309 Alcoholic Beverages 127 190 306 371 575 Tobacco Products 181 274 310 339 285 Miscellaneous 361 471 770 1080 1705 Est. Total Taxable Expenditures $3,033 $4,274 $6,205 $9,029 $14,542 Est. Current Sales Tax Paid $2 2 0 $310 $4 5 0 $6 5 5 $1 ,0 5 4 Additional Sales Tax per Year $15.16 $21.37 $31.02 $45.15 $72.71 Average Household Sales Tax---------------------------------------------------$37.08 Per month $1.26 $1.78 $2.59 $3.76 $6.06 Relative Sales Tax Burden- 1.00 1.41 2.05 2.98 4.79 Equivalent Cost Ink Pen--------------------------- $1.26 Pack of cigarettes--------------------------- $1.78 Big Mac & Fries, no soda------------------------------------ $2.59 Bagof Cookies----------------------------------------------------------------- $3.76 Businesslunch-------------------------------------------------------------------------------- $6.06 Figures are from the 1991 Consumer Expenditure Survey, Bureau of Labor Statistics. Analysis by the Small Business Development Center, Paul Cook 10/25/95 Attsc-�iment "I" ADbCNISTRAMN CITY OF WICHITA FALLS INTER-OFFICE MEMORANDUM To: Jim Berzina, City Manager DATE: March 14 , 1996 FWK: Jim Dockery, Assistant City Manager BIIHJECT: City's Projects/Programs for Economic Development The following information has been compiled by City staff to identify City projects and programs that assisted economic and/or industrial development. This information was requested by the Committee on Infrastructure and Development and pertains to the last three to four fiscal years. Nonannexation Agreements The City Council adopted a nonannexation policy in December 1980 for the purpose of providing prospective industries, the BCI, and the City's administrative staff with definitive guidelines concerning industrial annexation. The policy is applicable to both defined industrial parks and to areas outside industrial parks which are susceptible or planned for industrial land uses. Specifically, the policy allows for the City to enter into nonannexation agreements with industries planning industrial development or expansion of existing industries. These agreements guarantee immunity from annexation for a certain period of time in exchange for job creation. Typically, the nonannexation agreements offer reduced advalorem taxes as payments in lieu of taxes and higher utility costs. The City currently has nonannexation agreements with 10 industries and the figures below indicate the total revenue potential that would have been paid to the City had these nonannexation agreements not been in place: FY 94-95 $826,494 FY 93-94 788,900 FY 92-93 167,115 „t i, i t.. ew:;ens In addit3.�n to nonannexation agreements, the City has incurred the cost of ttract industrials development. Theserovements sprojectsrareve venture to a identified below: Prison Water $ 406,436 Prison Sewer 722,669 SAFB Sewer Phase II 1, 138,815 0,000 3,54 0,000 Prison Grinder System (Proposed) Arizona Trunk Main (Proposed) (Proposed) 0 , 00 SW Industrial Dist Lift Station , Other Programs The City also has several other programs in place that assist economic development. Attached is a description of these activities. J i kery Assistant City Manager JD:ch Attach. c: George Bonnett Dave Clark Fred Werner ENTERPRISE ZONE ACTIVITY Benefits are directly related to the amount of jobs created and include abatement of sales taxes for materials used in construction, refund of State franchise taxes, the potential for reduction in electric utility rates, and local development fee rebatm The larger benefits are not from the City. City staff does prepare applications and administers the Zones. Since 1991, when the north and ea*enterprise zones were established, seven enterprise projects have been approved in Wichita Falls. The seven projects have provided 516 new jobs with a payroll of S10,215,000. An application by Vetrotex CertainTeed has been submitted with approval pending on the approval of a zone boundary amendment. Vetrotex CertainTeed proposes to add 70 new jobs with a payroll of $1,700,000. The seven approved projects are listed below with the number of new jobs created and payroll of these jobs. PROJECT JOBS PAYROLL Howmet Refurbishment Center 75 $2,500,000 Roadway Package Systems 14 $425,000 Stanley Mechanics Tools 150 $3,000,000 The New Trade Winds Motor Hotel 10 S215,000 The Petroleum Building Hotel 12 $250,000 Holiday Inn of Wichita Falls 30 $225,000 Fleetwood Homes of Texas 225 $3,600,000 .TOTAL 516 t $10,21S,M0 a TAX INCREMENT FINANCING Part of the downtown and medical district areas are included in a Tax Increment Financing District This means that increased property taxes from a new project or a significantly remodel (the increment) are paid as usual, but rather than go to the school district, County and City they become pert of a "nF" fund. The original property tax base still goes to the taxing districts so they do not"lose" money, but are rather part of an incentive to improve overall economic development. Funds are administered through the Department of Community Development of the City. The Planning Division staff will assist in identifying eligibility and advise on needed documentation. Decisions on funding are made by City Council after recommendation from a citizen committee. Projects must meet the goals of a Tax Increment Finance Plan and be eligible under State requirements. Below is a list of TIF applications: MTG. PROJECT NAME DATE REQUEST AWARD COMPLETE 900 Br(x*.Walgreen's S/'91 $15,000 S I SAW yes Hawkins dt Horton Wichita Co.Heritage Soc. 8/92 $11,354 $11,334 yes Oh St fens dt landscaping vision Wichita Falls 7/94 $58,000 $58,000 no Scott Ave.Landscaping ISTEA Fnhancone t math BSP Properties 1/95 $41,200 $5,000 no 1005 9th St improvements Bundy,Young,Sims,Potter J.A 13.A.Trust 1/95 $43,101 $3,000 no Gu ft B{dg.WVroveme ft 1600 9th St b(PEC Im S300,000 $300,000 yes UndseWing&site ipovavaofa WWhifa vap 1/9S $30,000 S5,000 no Sew= Holiday Inn Parltieg i■pe+ov mmu 3M S75,000 S7S,000 yes 1 r M COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDS CDBG funds are provided annually to the City, as an "entitlement" community, from the federal government. Uses are restricted for the benefit of low and moderate income people, the elimination of slums and blight, and urgent need (essentially disaster assistance). Utilization requires public hearings, program design, and extensive reporting to the U. S. Dept. of Housing and Urban Development(HUD). Three economic development programs have been available in the last three years: Teltguest $50,000 grant authorization for utility installation assistance and training for new jobs created (initial creation not replacement). 225 jobs have been created and the company recently moved into new downtown offices due to the size of the staff. Wichita Falls Development Corporation(WFDQ Newly created corporation which provided high risk loans for start up or businesses. Program developed to include participation from five local banks. Project was fund from banks, 30% from WFDC, and 10'/o by applicant. The application must be submitted to the Small Business Development Center at Midwestern. Five loans given for a total of$37,349 in CDBG funds. This was to facilitate the development of 11 jobs. Several of these have not been successful, others are still operating. Program was discontinued in 1995 due to availability of assistance from Small Business Administration "Low Doc" program, which accomplished similar benefit without the HUD degree of paperwork requirements. Facade Enhancement Emg= $100,000 available as one third match for rehabilitation of facades and roof of qualified buildings in downtown area. CDBG fund usage requires "blighted" strucum design professional ass�nce, design review, bidding procedure, pmvailmg wages. 'Ibis program is mtendod for larger scale rehabilitation projects. Maximum assisume is$50,000.