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12-18-2009 (WEDC) Minutes mutes Wylie Economic Development Corporation oard of Directors Meeting Friday, ecember 18, 2009- 6:30 ANL Inwood National Bank - Conference Room 200 South Highway 78 -Wylie, Texas CALL TO ORDE' Announce the presence of a Quorum President Fuller called the meeting to order at 6:30 a.m, Board Members present were: John Ye ger, Todd Wintters, Mitch Herzog, and Chris Seely, VEDC staff present was Executive Director Sam Satterwhite a d Administrative Assistant Gerry Hanis, Ex-Officio Board Members Mindy anso,„ Eric Hogue, Assistant City Manager Jeff Butters, and City Engineer Chris Hoisted were present. Board Member Mitch Herzog le the meeting at 7:53 a.m. Ex-Officio bard ember Eric ogue left the meeting at 7:55. CITIZEN ARTICI1 AT1ON There being no citizen participatio , President Fuller proceeded to Action Items. ACTION ITEMS ITEM 0. 1 - Consider and act ilpOL approval of the November 20, 2009 Minutes of the WEDC Board of Direct o rs Meeting. MOTION: A motion was ade by Mitch erzog and seconded by John Yeager to approve the ovember 20, 2009 Minutes of the WEDC board of Directors Meeting. The WEDC Board voted 5 - F011 and 0 - AGAINST in favor of the motion. ITEM NO. 2 - Consider and act pon approval of the Novem er 2009 Treasurer's Report. Staff reported that the October Treasurer's Report had an error in that the Current budget nub bers on the '1 evenue and Expense Report were from FY 08-09 rather than the FY 09-10. President Fuller asked staff to present a corrected Treasurer's report for October at the January meeting as well as present a corrected report to the City Council at their January eeti g. MOTION: A motion was made by Chris Seely and seconded by Mitch Herzog to approve the November 2009 Treasurer's 'eport. The WEDC Board voted 5 - FOR ad 0 - AGAINST in favor of the otion. WEDC —Minutes December 18, 2009 Page 2 of 6 ITEM NO. 3 — Consider issues surrounding the FY 2009 —2010 WEI C Budget. As re oiled in the November WE IC financial state,lents, sales tax receipts were down 10.5°/0 from Pecei ber 2008. Assuming taxable sales at Target generated $10,000 in WEDC receipts, staff is projecting a 22% reduction had Target not been in place. Staff commented that a continued 20% reduction could result in a $300,000 shortfall in budgeted revenues Icing that 90% of WEDC income is froi, sales tax receipts, staff believes that expenditures should be monitored more closely. Should the downward trend continue, a more formal reduction in revenue/expenses would take place i April during mid-year budget amendments. Staff presented potential expense reductions which will informally applied until which time an upward trend is established. Those in-house reductions were as follows: Office Supplies - 31%, Special Services — 32%, Incentives — 11%, Streets & Alleys — 60%, Advertising 16%, Travel Sz Training 38%, Audit & egal - 44%, Engineering & Architect — 30%, and Land - 25%. This item was presented as an info ,-nation item only. No action was taken by the Board. ITEM NO. 4 — {Motion tsr remove item from table}: Consider an. act upon issues surrounding City of Wylie thoroughfare impact fees. OTION: A motion was made by John Yeager to remove Action Item No, 4 from the table. As a review, staff stated that he believes that there is a high level of co rrfidence that the fees are Jrstifled to offset the cost of providir rrg infrastructure and are being calculated correctly. Staff further stated that based upon previous discussions by the Board members, the only issue that could possibly be addressed is the difference between fees chargel for the east zone and those charged for the west zone (the east zone is 40% higher than the west zone), Staff provided all possible options which could be recommended to the Cow cil and the repercussions of each. 1. No Change, While this is one of the top two options in staffs opinior, I do believe there is the local perception that thoroughfare fees are too high. Also, there is the potential that we are discourairrrrg new business development (specifically on the east side) prior to the prospect even getting to the point of negotiating with the City for incentives. I believe to assume that if this is the case one must consider the relatively high tax rate in place combined with the fees. 2. No Fees. Staff believes this is not a realistic option. If no thoroughfare impact fees were in place, new development would share an equal finarcial burden with the existing taxpayer f r the increased demand pi ced upor the infrastructure created by the new development. That fina cial burden would specifically be increased property taxes. 3. East and West Zones Charged Identical Unit costs. The only issue staff has with this recommendation is that the fees charged within the west zone would be proportionately higher than the east zone. If you will recall from previous presentations, both zones have aporoximately the same amount o f cost attributed to growth per the Capital Improvement 'Ian currently adopted by the City Council. However, the east side has much less opportunity for new growth (a smaller pool of new development) thus creating a higher WE C — Minutes December 18, 2009 Page 3 of 6 fee per new development Li' it to recoup the cost attributed to oN,vth. The restonse to any developer raising that point (which is unlikely anyway) is that we want to encourage development withi the east zone, thus charging a lower percentage fee. Should this option be considered, the 'bard/Council would have to anticipate less fees within the east zone to flu d future projects and rely on the use of General Find monies or tax rate increases. 4. Lower Each Zone's Unit cost an Equal Percentage. Staff does not believe this is a viable option because there is no real or perceived concern with Thoroughfare Fees within the west zone, New business development is taking place, and will continue to take place predominately within the west zone because of the infrastructure which has been put in place or will be in place within the next two years. Staffs recommendation was for the Board to evaluate the above options and make a recommendatio, to the City Council, even if the WEDC recommendation is no change. If there is a recot mended change by the WE DC Board and the Council directs City staff to address the W DC recomme dation, a presentation will most likely be made to the Impact Fee Advisory Committee which in turn will make a recommendation to the City Council during a work session. Should the Council decide to proceed; a public heaL ng will take place on the issue resulting in a change to the existing Ordinance assuming an affirmative vote by Council. Staff commented that there currently is relief (in the form of incentives) available to any teveloper bringing in a qualifying project to the City — east or west zone. If there is unanimous agree]. ent with that positio , the only recommendation is no change. A no change recommendation is 100% equitable. However, if a developer targets the east side and detet 'ines that their financial model will not work, and further evaluates the fact that thoroughfare impact fees in Wylie are higher than the communities we are come eting with, we may not get the opportunity to address their concern, At that point equity between the zones has no bearing and a perception of'the cost of doing business in Wylie is too high' is the deten-nining factor. Under the second scenario a recommendation should be having identical unit cost within the east and west zones. Staff recommended that the WEDC Board of Directors make a recoiL me' dation to the Wylie City Council to red ce Thoroughfare Impact Fees charged in the east zone to equal that of the fee charged within the west zone. President Fuller re-emphasized his opinion that the Thoroughfare Impact Fee difference from the east side of Hwy. 78 to the west side of Hwy. 78 is perceived as excessive and arbitrary, Mr. Fuller continued that even if the 'line' was moved 300' west even increasing fees by 40% on the west side of the 78 corridor, that perception could be addressed. Board members ' 'erzog, Seely, and Yeager did not see any reason to adjust the fees at all being that any company has the opportunity to approach the City/WE IC for financial assista' ce whether it be for infrastructure assistance, relocation grants, or fees, WEDC MinE tes December 18, 2009 Page 4 of 6 MOTION: A motion was made by John Yeager and seconded by Mitch ' erzog to recommend to Council that no change be Jade to the Thoroughfare In-r act Fees. The WEDC '..,oard voted 5 FOR and 0 — AG1,,,J1 ST in favor of the motion. EM NO. 5 — Consider issues surrounding the 2009 Annual Report Staff presented the first draft of the 2009 Annual Reeort for the oard to review, President Fuller asked that staff bring the docume t back in January for further consideration being that the Board has only had a short time to review the document. Staff commented that the final report will be submitted to Council on January 22, 2010 o action was taken on this item. EM NO. 6 — Staff Report: review issues surrounding the lease of WEDC facilities, the 2009 IE C Annual Conference, Applebee's, Wylie Senior Care, and regional housing starts. Lease o WEDC Facilities: While the Fen-ell property has been leased, a certificate of occupancy (CO) has Jot been iss ed as of yet based upon difficulties with the hot water heater. A CO shouli be issued no later than Friday, December 18th. The contract calls for $800 monthly with no outside storage. The Contract also calls for the tenant to mow and maintain the adjacent one acre fra ting F.M. 544, 210 Industrial Court has been leased. The WEDC had been seeking $2,000 per month. Staff will be executing a 12-month lease for $1,500 per month. With the facility being vacant fOr 16 months, staff accepted a lesser lease rate. The lease is however AS IS with no responsibility for plumbing, air conditioning/heat, and roof. That concession was accepted by the tenant in return for the lease rate. The tenant is also required to maintain the premises and no outside storage is allowed. 2009 IEDC Conference: Assistant City Manager. Butters presented issues surround 'green' construction and regional cooperation in economic development that had been presented at the Conference. Applebee's: Staff indicated that Applebee's is nder contract for a site on State Highway 78. Applebee's broker indicated that all site criteria fit within the required parameters. ff1 lie Senior Care: A temporary CO ,as been issued for Wylie Senior Care (located behind Brookshire's). After all equipment and furniture has been moved in and the Texas Department of Health has approved the site, a final CO will be issued, The owner contacted staff the week of December 7th and asked again if there was any financial incentive the WEDC/City could provide. It was conveyed that staff believed that there was support for any financial assistance. WE tC — Minutes December 18, 2009 Page 5 of 6 Regional Housing Starts: Housing starts were p in ovember and will be up in December as well with 21 permits already approvedibeing reviewed as of 12-16-09. it appears as though Wylie will issue at least 250 permits for 2009 (down 39% from 2008). As stated in the past, staff is pleased with 250 new homes in this market. EXEC TIVE SiSSION The WEDC Board of Directors convened into Executive Session at 7:30 a.m. Assistant City Manager Jeff Butters and City Engineer Chris Hoisted were invited to stay for Executive Session. I, Consider issues surrounding an Amended and Restated Performance Agreement between the WEDC and Woodbr dge Crossing, L.P. as authorized in Section 551.087 (Economic Development egotiations) of the Local Government Code, Vernon's Texas Code Annotated (Open Meetings Act). IL Consider issues surrounding the purchase of property located near the intersection of Regency Drive and Steel Road as authorized in Section 551.072 (real property) of the Local Government Code, Vernon's Texas Code Annotated (Open Meetings Act). III. Consider issues surrounding the purchase of property located near the intersection of F.M. 544 and Sanden 1 oulevard as authorized in Section 551.072 (real property) of the Local Government Code, Vernon's Texas Code Annotated (Open Meetings Act). IV, Consider issues surrounding Project Phoenix as authorized in Section 551.087 (Economic Development Negotiations) of the Local Government Code, Vernon's Texas Code Annotated (Open Meetings Act). RECONVENE INTO OPEN HEETING The WEDC Board of Directors reconvened into open session at 7:59 a.m. No action was taken as a result of discussion held in Executive Session. ADJOU * 'MENT With no further business, President Fuller adjoined the WEDC Board meeting at 7:59 a.m. vt, Marvin Fuller, President WE 10 C -Minutes ecember 18, 2009 'age 6 of 6 ATTEST: Samuel D. . Satterwhite Executive Director