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4B Sales Tax Corporation Minutes - 09/26/2016MINUTES OF THE WICHITA FALLS 4B SALES TAX CORPORATION (4BSTC) September 26, 2016 PRESENT: Tony Fidelie, President § Members Glenn Barham § Dave Clark § Rick Hatcher § Derik Schneider § Tim Ingle, Councilor, District 4 § City Council Stephen Santellana, Councilor, District 1 § Jesse Brown, candidate for Councilor, § District 4 (unopposed) § Jim Dockery, Deputy City Manager § City Staff R. Kinley Hegglund, Jr., City Attorney § Linda Merrill, Recording Secretary § John Ingle § Times Record News ABSENT: Darron Leiker § Members Michael Mills § 1. Call to Order Tony Fidelie called the meeting to order at 4:00 p.m. 2. Approval of Minutes (August 26, 2016) Jim Dockery noted on page 3, the $50,000 referenced in one of the bulleted items should refer to the downtown grant program, rather than to staff assistance. Dave Clark moved, seconded by Rick Hatcher, for approval of the minutes as amended. The motion carried. City Clerk Tracy Norr issued the oath of office to new member Derik Schneider. 3. Consider adoption of the 2016-17 fiscal year budget Jim Dockery discussed the proposed 2016-17 budget. Projected revenues total $4,067,636. Expenditures total $3,153,484, leaving a surplus budget of $914,152. The Board also has an estimated beginning cash balance of $3.8 million, but prior commitments of $757,000. With no future appropriations, the Board would have $3.972 million in funding to allocate to projects. NA legal\4A, 4B, TIPS\4B Corp\4B Minates\2016\2016.9.26\Minutes_4B_2016.9.26.doe WFEDC — Minutes of September 26, 2016 2 Revenue - Sales tax is the fund's largest revenue; there are two more months of sales data to record for this fiscal year. Sales tax is budgeted at $3.7 million, a reduction from FY 2015-16, as there is a .89% decline from last year. Staff does not budget growth in sales tax revenue. Interest earned is invested in local government investment pools, which are safe but low earning. The fund is reimbursed annually $358,000 from TIF 42 for the Maplewood Extension and Call Field/Rhea Road Realignment Project. The 413 Board gap financed that project but the TIF fund is now caught up on its payments. Debt Service - Projects — The City has issued bonds for various projects over the years for which the 413 Board agreed to pay debt service. These are quality of life projects, including trail work, firing range, golf course renovation, Castaway Cove, and airport renovation. Downtown improvement grants — Three years ago, the 4B Board began financing up to $5,000 in matching funds to renovate downtown, including code upgrades, roofing, fagade improvements, electrical, and plumbing. Staff approves these projects if they meet the 413 - approved guidelines. The grants have increased from $18,000 the first year to $40,000 this year. CVB incentive funding — The 4B Board provides $35,000 per year to the CVB to use to provide additional incentives to potential conventions to come to Wichita Falls than the hotel/motel fund can provide. This is a fund that might be needed even more as MPEC operations are improved through the outside management firm, and as more conventions are brought into town if the convention hotel becomes a reality. Mr. Hatcher wondered if the hotel/motel fund might actually bring in more funds as the management company improves MPEC operations. Mr. Dockery said it is best to take a wait-and-see approach. Capital Equipment - Three projects contemplated at the inception of the 4B sales tax were the radio maintenance, CAD/records maintenance, and mobile data terminals. These projects were on the ballot when citizens voted for the 4B sales tax, and the maintenance costs have always been an obligation of the 4B board. Mr. Fidelie asked if this obligation is a ballot requirement. Mr. Dockery said it is not, but state statute allows 4B funds to pay maintenance on any project it initially funded. If the City had to fund those maintenance fees out of the general fund, it would have to raise the property tax rate in order to do so. Street improvements — The sum of $400,000 is budgeted for renovation of streets in the downtown area. This year, Indiana Avenue is to be renovated. Mr. Dockery added that a street assessment study was done about 10 years ago, and the City was told it should spend about $4 million per year on street improvements; at the time, it was spending $1.6 million. The City Council raised the tax rate two cents to earmark $800,000 at that time to increase the street overlay budget, and the 4B Board voted to fund $400,000 toward commercial street improvement in the downtown area. Mr. Hegglund noted that state statute allows 4B funds to be spent on street and roadway projects if the 4B Board makes a finding that such funding would develop or promote new or expanded business opportunities. Such a finding was made. Administrative charges — The sum of $10,000 offsets some of the time spent on 4B duties by Mr. Dockery and Mr. Hegglund. WFEDC — Minutes of September 26, 2016 Rick Hatcher moved, seconded by Glenn Barham, to approve the budget as presented for fiscal year 2016-17. The motion carried 5-0. 4. Consider modification of contract terms and conditions for 922 Indiana regarding property lien requirements Kinley Hegglund noted that a few months ago, the 4B Board granted up to $65,000 to investors for the property at 922 Indiana for the purchase and installation of a fire suppression system. However, the investors would not receive any money until the project was completed and the Certificate of Occupancy was issued by the Building Official, The Board also required a first lien. He and Mr. Dockery recently met with Sammy Pak, one of the investors. They purchased the property from the prior owners, who are financing the note. The prior owners refuse to give up their first lien priority interest. Mr. Fidelie said there is a delicate balance between protecting funds and incentivizing growth. He believes the Board is protected well enough without the lien requirement, and stressed that all other terms remain the same. If they are not successful, they will leave a completely renovated building and presumably someone else will move in. Mr. Hegglund noted the last agreement the 4B Board entered did not include the lien requirement. Dave Clark said this Board is essentially giving grants, and other folks in the first lien position are giving loans. Mr. Hatcher moved to remove the requirement of a lien from the contribution of up to $65,000 for the cost and installation of a fire sapression system at 922 Indiana for the Pops LLC grocery store/soda fountain project. All other terms of the initial motion approved April 25, 2016 remain the sarne.1 Seconded by Mr. Clark, the motion carried 5-0. 5. Executive Session Mr. Fidelie adjourned the meeting into executive session at 4:44 p.m. pursuant to TEXAS GOVERNMENT CODE section 551.087. Ile announced the meeting back into regular session at 5:03 p.m. The subjects posted in the Notice of Meeting were deliberated, and no action was taken on these items in executive session. 6. Adjourn. Glenn Barham moved.,to, adjourn. Seconded by Rick Hatcher, the meeting was adjourned at 5:03 p.m., Guy A. "To &" Fidelie, Jr., President The sum of $65,000 will be granted on a reimbursement basis once the Certificate of Occupancy is issued by Z, the City's Building Official; such, sum to be used for fire suppression system costs and installation at 922 Z� Indiana for the Pops, LLC grocery store/soda fountain prqject: in addition, such funding shall be structured under a five-year forgivable loan, forgiven every year of successful operation at a rate of 20% per year.