07-18-2018 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Wednesday, July 18, 2018 —6:30 A.M.
WEDC Offices—Conference Room
250 South Highway 78—Wylie, Texas
CALL TO 0 ' PER
Announce the presence of a Quorum
President Marvin Fuller called the meeting to order at 6:31 a.m. Board Members present were
John Yeager, Bryan Brokaw, Todd Wintters, and Demond Dawkins.
Ex-officio member Mindy Manson, City Manager was present.
WEDC staff present was Executive Director Sam Satterwhite, Assistant Director Jason Greiner,
and Senior Assistant Angel Wygant.
President Fuller called the Board's attention to an award that had been received from the Texas
Economic Development Corporation for Achievement of Economic Excellence. Mr.Fuller further
congratulated staff and members of the Board for their efforts that contributed to the receipt of this
award.
CITIZEN PARTICIPATION
With no citizen participation, President Fuller asked all Board Members, Staff and Ex-officio
members to stand for an invocation and pledge of allegiance.
ACTION ITEMS
ITEM NO. 1 — Consider and act upon approval of the June 12, 2018 Minutes of the Wylie
Economic Development Corporation (WEDC) Board of Directors Meeting.
MOTION: A motion was made by Todd Wintters and seconded by Demond Dawkins
to approve the June 12, 2018 Minutes of the Wylie Economic Development
Corporation. The WEDC Board voted 5 —FOR and 0—AGAINST in favor
of the motion.
ITEM NO.2—Consider and act upon approval of the June 2018 WEDC Treasurer's Report.
Staff reviewed the items contained in the Treasurers Report and called the Board's attention to the
continuing downward trend in sales tax this month (-4.29%) and -4.5% for the year. Staff is still
using flat sales tax numbers for budgetary purposes for FY 2018-2019 but will monitor revenues
closely to determine if revenue amendments are required.
WEDC—Minutes
July 18, 2018
Page 2 of 12
In reviewing the Inventory Subledger, Staff called the Board's attention to an adjustment to the
Hwy 78 lot acreage. Following the SCSD-Finnell transaction, the remaining lot area was
incorrectly listed as 1.6 acre and has been corrected to the actual 1.445 acre.
Staff mentioned that the WEDC Financials are sent to City Council and placed within the Consent
Agenda for review. Further, Council has access to the full Board packet, including financials,
prior to each Board meeting via a link sent by the City Secretary's office.
MOTION: A motion was made by John Yeager and seconded by
Todd Wintters to approve the June 2018 Treasurer's Report, as amended, for
the Wylie Economic Development Corporation. The WEDC Board voted 5
—FOR and 0—AGAINST in favor of the motion.
ITEM NO. 3—Consider and act upon authorizing the WEDC Executive Director to execute
a contract for alley improvements generally located east of Ballard Street between Jefferson
Street and Brown Street.
Presented for the Board's consideration and review were two bids for construction of the
contemplated alley between Jefferson and Brown,just east of Ballard. GT Construction came in
at $107,155 with Texas Dirt Contractors coming in at $246,775.
In reviewing the bids, staff noted significant variances between the bids involving mobilization,
tree trimming, general conditions, and seed/prep among other totaling $43,000 with the bids still
$100,000 apart.
The one item not included in the GT bid which will have to be inserted is a 2-year maintenance
bond. GT has been asked to provided that figure prior to the Board meeting which Helmberger
Associates(who will be providing construction management)estimates to be no more than$5,000.
Texas Dirt bond is $8,864.
Once a proposal is executed, Helmberger will contact all applicable utility companies to initiate
relocation(not included in either bid) and the contractor will schedule the project.
President Fuller asked what Helmberger's fee was for construction management and staff replied
their fee was 8% of the project, or approximately $8,000.
The Board inquired about relocation of utilities with staff responding that those figures will not be
provided until relocation is requested. Staff did anticipate that the paving, utility relocation, and
bond will be less than the $150,000 budgeted for this project.
Staff recommended that the WEDC Board of Director's authorize staff to execute a contract with
GT Construction in the amount of$107,155 for alley improvements between Jefferson and Brown,
just east of Ballard.
WEDC—Minutes
July 18, 2018
Page 3 of 12
MOTION: A motion was made by Demond Dawkins and seconded by John Yeager to
authorize staff to execute a contract with GT Construction in the amount of
$107,155 for alley improvements between Jefferson and Brown,just east of
Ballard. Further, the Board approved expenditures associated with this
project not to exceed a total project cost of $150,000. The WEDC Board
voted 5 —FOR and 0—AGAINST in favor of the motion.
ITEM NO. 4 — Consider and act upon issues surrounding principal reduction payments
toward a loan(s) between the WEDC and The American National Bank of Texas.
At the June 12th WEDC Board Meeting staff was given direction to pay in full the Linduff/Edge
and Buchanan Loans. The estimated payoffs at the time were$378,770 and$107,264 respectively.
With the Zoning Board of Adjustments variance approved and the FINNELL transaction complete,
the Linduff/Edge loan was paid in full on 7-13-18 in the amount of$363,943.
In addition to the above, staff was directed to make a principal reduction payment of$300,000
toward the Peddicord/White loan. As a reminder, the $300,000 payment left the WEDC with
approximate net proceeds of$500,000 from the FINNELL transition thus increasing the current
claim on cash at the time of$376,000 to $876,000.
The Peddicord/White Loan has an approximate payoff of$503,155 with a current rate of 4.2%
adjusting to a FHLB 5-year rate +2.5% in December 2019, and annually thereafter through 2024.
The current FHLB rate is 3.19%.
Staff received additional information from American National Bank (ANB) since the June 12th
meeting which may impact the previous direction given. As staff conveyed the Board's concern
to ANB regarding lower interest rate loans being paid off and significantly higher rates for
potential future debt being contemplated, ANB conceded that it may not be so important to pay
off the Buchanan loan which now has an approximate payoff of$100,268 and a fixed interest rate
of 3.77%through July 2019.
Following payoff of Linduff/Edge,the WEDC has net proceeds from the FINNELL transaction of
$896,328. Staff commented that should certain projects being considered in Executive Session
come to fruition, the WEDC may need to borrow monies at a rate of 6%.
With favorable fixed rates for Buchanan (3.77%) and Peddicord/White (4.2%through December
2019), along with ANB being less concerned about paying off the Buchanan Loan, staff
recommended that the Board reevaluate further principal reduction payments until a clearer
direction is achieved on future projects. If agreeable, staff will bring this issue back for Board
consideration within the next 60 days.
MOTION: A motion was made by John Yeager and seconded by Demond Dawkins to
delay further principal reduction payments contemplated on June 12,2018 for
approximately 60 days. The WEDC Board voted 5—FOR and 0—AGAINST
in favor of the motion.
WEDC—Minutes
July 18, 2018
Page 4 of 12
ITEM NO. 5 — Consider and act upon a work order between the WEDC and W&M
Environmental to address environmental issues located at 802 W. Kirby.
Staff reviewed the environmental work done to date at 802 W. Kirby and informed the Board the
property must be identified as a Municipal Setting Designation (MSD) and enrolled in the
Voluntary Cleanup Program through the TCEQ. Unfortunately,the EPA Ready for Reuse process
did not address groundwater issues which can be accomplished with a MSD and the VCP Program.
Staff reiterated that the WEDC is paying all costs associated with the clean-up of this site and it is
anticipated that the City of Wylie will reimburse the WEDC out of the proceeds of future sales.
President Fuller questioned why our environmental contractor did not provide us with an earlier
notice that there may be a problem and additional work needed on this property. He inquired as
to whether we should consider a new environmental contractor for the next phase of the project.
Staff explained that the timing of the work on the EDC property adjacent to this property and the
City's acquisition of the CRI property was a factor in the late notice regarding this additional work.
In addition, staff learned that the EPA had the groundwater data and did not provide the data to
the City or W&M. Staff reiterated that both he and our environmental attorney believe that W&M
is the natural choice for the remaining work and to start over would require an alternate firm to
prepare the same preliminary data which has already been completed by W&M.
Vice President Wintters commented that W&M has an excellent reputation and he has full
confidence in their abilities. Further,it is a complicated project with many unanticipated variables
which would make the 'additional' work difficult to predict.
Staff recommended that the Board approve a work order in the amount of $57,500 for
environmental work to be performed at 802 W. Kirby by W&M Environmental.
MOTION: A motion was made by Todd Wintters and seconded by
John Yeager to approve a work order not to exceed$57,500 for environmental
work to be performed by W&M Environmental. The WEDC Board voted 4
—FOR and 1 —AGAINST in favor of the motion with President Marvin Fuller
dissenting.
ITEM NO. 6—Consider and act upon approval of the FY 2018-2019 WEDC Budget.
Staff informed the Board that a preliminary budget presentation was made to the Wylie City
Council on July 12th.
In review, staff typically identifies fixed operating expenses, makes reasonable assumptions on
costs associated with consultants, details existing incentive commitments, provides a minimum
amount of monies for land acquisition, and places the balance of available resources in 'Future
Projects' to be used for incentive programs which have yet to be identified.
WEDC—Minutes
July 18, 2018
Page 5 of 12
As provided to the Board,the WEDC has budgeted $4,636,927 in available resources as follows:
Beginning Fund Balance $620,887
Sales Tax 2,600,000
Rental Income 112,440
Pad Sale (Highway 78) 1,300,000
Interest Earnings 3,600
Total $4,636,927
In calculating the Beginning Fund Balance, it was anticipated that $100,000 was to be paid out to
REVA which does not appear to be taking place with the Performance Agreement in Default.
As sales tax projections were established in May, FY 2018 — 2019 were calculated with no gain,
or flat, over FY 2017 —2018. With continued downward trends in sales tax receipts, year-end is
projected at$2,550,000. Based upon significant gains in our major retail centers and the hangover
effect from the hail storm surely to be over soon, staff is still comfortable with the $2.6 mm
projection.
The pad sale of$1.3 mm represents a theoretical sale in the low$20's psf. Staff was quick to point
out that a sale in the low$20's would be the result of a user the community is eager to attract with
the WEDC subsequently considering a'below market' sale. So as to not skew the budget,the sale
is wholly offset by principal reduction of$1.2 mm within Debt Service and $100,000 in closing
costs within Land.
Staff presented line item expense recommendations as follows:
Personnel Services $426,577
Supplies 14,040
Materials for Maintenance 2,000
Contractual Services 1,319,989
Special Services 148,900
Advertising 127,000
Community Development 53,600
Communications 9,628
Rental Expense 29,328
Travel & Training 53,425
Dues & Subscriptions 30,110
Insurance 3,110
Audit & Legal 33,000
Engineering—Architect 30,000
Utilities 2,400
Debt Service 1,751,819
Land 300,000
Street & Alleys 300,000
Computer Hardware 1,000
WEDC—Minutes
July 18, 2018
Page 6 of 12
Furniture & Fixtures 1 000
Total $4,636,927
Staff called special attention to the following:
• Salaries presented reflects a 2.5% increase over FY 17— 18.
• Within Incentives, $622,100 is allocated to ongoing commitments to eight different
projects and $697,889 towards Future Projects.
• Within Special Services, only $5,000 has been budgeted toward an Interlocal Agreement
with the City for the provision of financial services. Staff conveyed that there was a
discussion at a Council budget work session that $5,000 may not reflect the true value
received. While staff had not been presented with a figure which may reflect a more
accurate 'cost', staff requested direction from the Board and allow Staff to work with the
City Manager/Council to potentially amend the Interlocal Agreement.
• Also within Special Services, staff requested that the Board consider increasing the
presented budget by $100,000 to study how future development downtown may impact
drainage and traffic patterns. Staff indicated that the Planning and Engineering
Departments will assist in drafting a RFP stating the parameters of the study.
• Community Development has continued funding for a regional brokerage event and an
Industrial Appreciation event for existing businesses.
• Also within Community Development staff recommended dropping Sporting Events due
to increased cost to participate as a Mavericks Season Ticket holder.
• Travel&Training contains monies for Wylie Days in Austin and sales tax training for staff
and Board members.
• Dues and subscriptions was presented with a $4,300 reduction reflecting a change in the
Directors Club Corp membership status from Full to Social.
• $200,000 within the Land budget is to be utilized for potential acquisitions.
• Streets & Alleys reflect a $150,000 project to pave an alley between Oak & Marble just
west of Jackson and $150,000 project to loop a water line system impacting the 544
Gateway project.
The Board provided direction to staff to make changes as follows:
• Increase Special Services by $15,000 to be available for changes to an Interlocal
Agreement between the WEDC and City.
• Increase funding for an Industrial Appreciation event from $5,000 to $10,000.
• Within Travel & Training increase Prospect Recruitment by $2,000 to allow the Director
increased opportunities for business networking to offset those provided by the reduced
membership status at Club Corp.
• Increase Audit & Legal by $6,000 to allow for anticipated legal fees associated with
additional projects.
• The Board directed staff to budget$10,000 for sporting events which is equal to prior year
commitments while identifying alternate opportunities other than a partial season ticket
holder for Mavericks.
WEDC—Minutes
July 18, 2018
Page 7 of 12
• Drainage/Traffic Study in the amount of$100,000 was approved.
• Direction was provided to increase the Beginning Fund Balance to $720,887 based upon
reduced spending (due to a default) in Incentives.
The Board directed staff to make the above changes prior to August 3, 2018 and bring the same
back for final consideration.
MOTION: A motion was made by John Yeager and seconded by
Bryan Brokaw to Table this Item until the next WEDC Board Meeting to be
held prior to August 3, 2018. The WEDC Board voted 5 — FOR and 0 —
AGAINST in favor of the motion.
Demond Dawkins left the meeting at 8:37 a.m.
ITEM NO. 7—Consider and act upon issues surrounding the Election of WEDC Officers
The Wylie City Council recently reappointed Mr. John Yeager and Mr. Demond Dawkins to a
three-year term as Board Member of the Wylie Economic Development Corporation with each
already sworn in by the City Secretary.
On an annual basis and following the selection of WEDC Board Members by the Wylie City
Council,the WEDC elects officers for the upcoming year. Provided for your review is Section V-
Officers of the WEDC By-laws. Section V provides for the selection of officers and the duties of
the same.
In 2017-2018 the WEDC Board of Directors elected the current officers as follows:
Marvin Fuller ....................President
Todd Wintters. Vice President
John Yeager Secretary
Demond Dawkins Treasurer
Bryan Brokaw Board Member
President Fuller requested that all Board Members remain in their current officer positions with
the exception of Bryan Brokaw whom he recommended take on the role of President.
All Board Members expressed their strong confidence that Mr. Fuller was the appropriate person
to lead the WEDC Board and encouraged him to reconsider and remain in his position as President.
Mr. Fuller reiterated that he believed the time was right for new leadership and encouraged the
Board to elect Mr. Brokaw as President.
Mr. Brokaw agreed to accept the position of President if the Board so chose.
MOTION: A motion was made by Todd Wintters and seconded by
John Yeager to elect the following slate of WEDC Officers for FY 2018 —
2019, effective at the adjournment of the 7/18/18 WEDC Board Meeting:
Bryan Brokaw— President, Todd Wintters — Vice President, John Yeager —
WEDC—Minutes
July 18, 2018
Page 8 of 12
Secretary, Demond Dawkins—Treasurer. The WEDC Board voted 4—FOR
and 0—AGAINST in favor of the motion.
ITEM NO.8—Consider and act upon the establishment of a Regular Meeting Date and Time
for the WEDC Board of Directors for 2018-2019
Section 4.07 of the WEDC By-laws states that the President of the Board shall set a regular meeting
date and time at the beginning of his/her term. Currently WEDC Board Meetings are set for the
third Wednesday of each month at 6:30 a.m.
All Board Members indicated they were in favor of keeping the date and time set for WEDC Board
Meetings as the third Wednesday of each month at 6:30 a.m.
MOTION: A motion was made by Todd Wintters and seconded by
John Yeager to establish the Regular Meeting Date and Time for WEDC
Board Meetings as the third Wednesday of the month at 6:30 a.m. The
WEDC Board voted 4—FOR and 0—AGAINST in favor of the motion.
ITEM NO. 9 — Consider and act upon a First Amendment to Performance Agreement
between the WEDC and Dank Real Estate, Ltd.
Staff reminded the Board that the WEDC entered into a Performance Agreement with DANK Real
Estate on October 25, 2017. The project features a 10,140 square foot expansion and the creation
of at least eight additional full-time employees. This expansion will bring DANK's overall
building footprint to 20,577 square feet and a total of 33 full-time employees. As a reminder, the
property is located at 216 Windco Circle with DANK moving to Wylie in 2011. This is the second
expansion at this location in seven years with all DANK Houston operations being consolidated
to the Wylie headquarters.
As indicated to the Board in a previous meeting, Ms. Hodge planned to begin the project within
the first quarter of 2018,but due to an unforeseen family medical issue,the project has just broken
ground recently. While it is possible that Ms. Hodge can still meet the initial January 31, 2019
deadline, staff believes that additional time is warranted under the circumstances. To that end and
to allow for further delays which may occur during the construction process, staff recommended a
6-month extension to meet the performance deadlines would be in the best interest of the Project.
Staff recommended that the WEDC Board of Directors approve a First Amendment to a
Performance Agreement between DANK Real Estate,Ltd,and the WEDC providing for a 6-month
extension of the deadline with all other performance measures unchanged.
MOTION: A motion was made by Bryan Brokaw and seconded by
Todd Wintters to approve a First Amendment to a Performance Agreement
between DANK Real Estate, Ltd, and the WEDC. The WEDC Board voted 4
—FOR and 0—AGAINST in favor of the motion.
WEDC—Minutes
July 18, 2018
Page 9 of 12
ITEM NO. 10—Consider and act upon a Performance Agreement between the WEDC and
Taylor& Son Properties, LLC.
As reported at the May 16th Board Meeting, staff approached Taylor & Son to encourage the
maximum amount of parking spaces be developed at the 1,290 square foot remodel taking place
by Taylor at their new 107 Jackson Street acquisition. Staff was able to confirm that with WEDC
assistance, Taylor will provide seven parking spaces behind the building.
After seeking the Board's direction at the and June 12th Board Meeting, staff prepared a
Performance Agreement with the following terms and Performance Measures:
Incentive No. 1 ...................... $3,200
A Proof of Certificate of Occupancy for a 1,290-square foot office building issued by
the City of Wylie by November 1, 2018; and
A Minimum project cost of$75,000; and
A Minimum qualified infrastructure cost of$6,400; and
A Construction of a minimum of seven parking spaces; and
A Ad valorem property taxes current.
A Eligibility expiration is November 30, 2018.
Staff recommended that the WEDC Board of Directors authorize the Executive Director to enter
into a Performance Agreement with Taylor and Son Properties, LLC to provide $3,200 in
reimbursements for qualified infrastructure assistance.
MOTION: A motion was made by John Yeager and seconded by
Todd Winners to authorize the Executive Director to enter into a Performance
Agreement with Taylor and Son Properties, LLC to provide $3,200 in
reimbursements for qualified infrastructure assistance. The WEDC Board
voted 4—FOR and 0—AGAINST in favor of the motion.
DISCUSSION ITEMS
ITEM NO. 11 - Staff report: Staff reviewed issues surrounding WEDC Performance
Agreement Summary, Environmental Activity Summary, REVA Hospitality,
Sandendlensley roadway improvements, Aerials, KCS Strategic Partners Conference,
WEDC website, public information requests, active project summary, and regional housing
starts.
Staff updated the Board on WEDC activities noting the addition of an" active projects" section of
the Staff Report.
June highlights included:
Sales Tax receipts for both major shopping centers were up significantly; and housing starts
remained strong with forty-seven new homes permitted in Wylie.
WEDC—Minutes
July 18, 2018
Page 10 of 12
REVA Hospitality failed to obtain a Certificate of Occupancy by June 30, 2018 as required under
the Performance Agreement and on July 9, 2018 a notice of default and termination of the
Performance Agreement was sent via certified mail, return receipt requested. Verification of
receipt has been received by the WEDC with no communication from REVA regarding this
default.
The WEDC Website is anticipated to go live by August 10th following final review,programming
of the site and incorporation of new technology into the site.
Mr. Satterwhite and Mr. Greiner have been invited to attend the KCS Strategic Partners
Conference in September. The KCS Industrial Development Manager believed this would be a
good opportunity for WEDC staff to learn more about KCS, the rail outlook for 2018 —2019, and
network with the KCS Intermodal Sales &Marketing Team.
Staff received and responded to a large public information request pertaining to all activities
surrounding the redevelopment of the 5-acre site at Cooper and State Highway 78 as well as the
acquisition of the Jarrard/Grey's Auto Electric property on Industrial Court. From June 18 —29,
approximately 45 WEDC man-hours were dedicated to compiling over 3,000 original pages and
210 electronic files for the above referenced projects. Included in that time was comparing the
hard copy original documents to duplicate electronic files paring down the 3,000 pages to 1,599
pages. The final task was accomplished the week of July 16th requiring staff to identify and
compile every email pertaining to the above projects.
ITEM NO. 12 - Discuss issues surrounding approval requirements and reporting practices
between the WEDC and Wylie City Council.
Staff informed the Board that in mid-June there were questions from Council pertaining to how
WEDC expenditures and projects are approved by Council. Ultimately, the WEDC Board serves
at the will of the Council with Council authorizing all financial transactions via the annual budget
and any required budget amendments. In each community there are varying levels of Council
oversight and involvement in EDC activities.
In Wylie, Council approves the WEDC Budget and program of work. As well,monthly financials
are approved by the Board and presented to Council for their review placed on file. Further,
Council is required to approve all debt incurred by the WEDC.
In practice, staff takes all WEDC property acquisitions to Council in Executive Session prior to
closing. While there have been times because of fast-paced negotiations that the WEDC needed
to put a property under contract prior to communication with Council, Council has always been
provided the opportunity for input prior to the expiration of a due diligence period. As well, staff
takes incentive programs that are 'of significance' to Council for direction within Executive
Session. Staff determines whether a project is significant or not based upon the funding level,type
of business, impact on the community/surrounding properties, and feedback from Ex-Officio
Board Members Mayor Hogue and Manson. However, several incentive programs each year are
not taken to Council which are typically less than $50,000.
WEDC—Minutes
July 18, 2018
Page 11 of 12
Staff commented that while the WEDC makes communication with the Wylie City Council and
City Staff a priority,there are always opportunities to improve which may include monthly updates
on active projects to Council within Executive Session if Council so chooses.
Finally, staff did confer with WEDC Counsel Randy Hullett to confirm that the WEDC was
meeting all reporting requirements under EDC governing statutes. Mr. Hullett also provided staff
with a presentation addressing Council oversight/reporting requirements as well as a thorough
explanation of qualified projects. This presentation was attached for the Board's review and has
been delivered to Council.
John Yeager left the meeting at 8:54 a.m.
ITEM NO. 13—Discussion of issues to be placed on a future WEDC Board Meeting agenda
(no substantial consideration/discussion allowed).
No Board Member requested any items to be placed on future Agendas.
Demond Dawkins returned at 9:04 a.m.
EXECUTIVE SESSION
Recess into Closed Session at 9:04 a.m. in compliance with Section 551.001, et. seq. Texas
Government Code, to wit:
Jason Greiner and Angel Wygant were excused from Executive Session at 9:06 a.m. for Board
discussion and consideration of:
Section 551.074 (Personnel Matters) of the Local Government Code, Vernon's Texas Code
Annotated(Open Meetings Act).
• Performance Evaluation and Merit Increases for WEDC Staff.
Jason Greiner and Angel Wygant returned at 9:13 a.m.
Section 551.072 (Real Estate) of the Local Government Code, Vernon's Texas Code Annotated
(Open Meetings Act). Consider the sale or acquisition of properties located at:
• Oak&Jackson
• State Highway 78 and Sanden Blvd.
• State Highway 78 & 5th Street
Section 551.087 (Economic Development) of the Local Government Code, Vernon's Texas Code
Annotated(Open Meetings Act). Deliberation regarding commercial or financial information that
the WEDC has received from a business prospect and to discuss the offer of incentives for:
4, Project 2018-4a
WEDC—Minutes
July 18, 2018
Page 12 of 12
• Project 2018-5a
• Project 2018-6a
• Project 2018-6b
• Project 2018-6c
• Project 2018-7a
RECONVENE INTO OPEN MEETING
- -
The WEDC Board of Directors reconvened into open session at 9:29 a.m. and took no action.
ADJOURNMENT
With no further business, President Fuller adjourned the WEDC Board meeting at 9:29 a.m.
Marvin Fuller,President
ATTEST:
Samuel Satterwhite, Director