06-21-2013 (WEDC) Minutes Minutes
Wylie Economic Development Corporation
Board of Directors Meeting
Friday, June 21, 2013 6:30 A.M.
WEDC Offices—Conference Room
250 South Highway 78—Wylie, Texas
CALL TO ORDER
Announce the presence of a Quorum
President Marvin Fuller called the meeting to order 6:30 a.m. Board Members present were:
Todd Wintters, and Mitch Herzog.
Ex-officio member Mindy Manson was present.
WEDC staff present was Executive Director Sam Satterwhite and Senior Assistant Gerry Harris.
Also present were Mayor Pro-Tern Nathan Scott, Ms. Lynn Grimes, and Mr. Don Hallum.
CITIZEN PARTICIPATION
Ms. Lynn Grimes, Keller Williams Real Estate/The Wylie Art Gallery, was in attendance and
asked if there had been any activity on a lot owned by First Baptist Church and that the WEDC
had discussed paving for downtown parking. Mr. Satterwhite said that the item is in this year's
budget and he intends to have that accomplished by the end of the current fiscal year.
Mr. Don Hallum was in attendance to make the WEDC aware that there is a deficit in the City of
Wylie for senior housing. He mentioned that there are approximately 10,000 people turning 65
daily. He and his wife moved here for retirement, but as the time approaches that they will need
assisted living, that they will have to move to a neighboring community for that type of living.
He asked that the WEDC please give dedicated thinking to attracting senior living facilities. The
Board thanked both Ms. Grimes and Mr. Hallum for their comments and attending the meeting.
With no further Citizen Participation, Mr. Fuller proceeded to Action Items.
ACTION ITEMS
ITEM NO. 1 — Consider and act upon approval of the June 4, 2013 Minutes of the Wylie
Economic Development Corporation(WEDC) Board of Directors Meeting.
MOTION: A motion was made by Mitch Herzog and seconded by Todd Wintters to
approve the June 4, 2013 Minutes of the Wylie Economic Development
Corporation. The WEDC Board voted 3 —FOR and 0 —AGAINST in favor
of the motion.
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June 21, 2013
Page 2 of 8
ITEM NO. 2 — Consider and act upon approval of the May 2013 WEDC Treasurer's
Report.
Mr. Satterwhite noted the date of a proposed incentive payment to T. W. Snider & Associates
was incorrectly identified as November 2014 with the correct date being November 2013.
MOTION: A motion was made by Todd Wintters and seconded by Mitch Herzog to
approve the May WEDC Treasurer's Report with the amendment noted
above. The WEDC Board voted 3 —FOR and 0—AGAINST in favor of the
motion.
ITEM NO. 3—Consider and act upon the election of WEDC officers for 2013—2014.
Staff presented that on June 11, 2013 the Wylie City Council appointed Mr. Marvin Fuller and
Mr. Mitch Herzog to a three year term as Members of the Wylie Economic Development
Corporation Board of Directors. On June 18, 2013 the appointees were sworn in by City
Secretary Carole Ehrlich.
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. Staff provided a copy of the WEDC
By-laws, Section V-Officers, for the Board's review which details the process for selecting
officers and the duties of the same.
Staff reviewed that on July 20,2012 the WEDC Board of Directors elected the current officers:
Marvin Fuller President
Mitch Herzog Vice President
John Yeager ..Secretary
Todd Wintters Treasurer
Staff recommended that the WEDC Board of Directors elect officers for the upcoming year.
Mr. Herzog mentioned that he felt that the success of the WEDC Board was largely due to the
wisdom and guidance of its President and he believed that Mr. Fuller should continue in that
capacity.
MOTION: A motion was made by Mitch Herzog and seconded by Todd Wintters to
approve the re-election of the same officers as the prior year. The WEDC
Board voted 3 —FOR and 0—AGAINST in favor of the motion.
ITEM NO. 4—Consider and act upon the establishment of a regular meeting date and time
for the WEDC Board of Directors for 2013—2014.
Staff reviewed that 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. After officers were
elected in the previous item, President Fuller is required to establish the regular meeting
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June 21, 2013
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date/time. Discussion at previous meetings centered on support for continuing to meet at 6:30
a.m. on the third Friday of each month.
Also as stated in previous meetings, staff would like for the Board to be open to evening
meetings should there ever be public support for that change. Staff stated that the WEDC Board
does not want to portray itself as discouraging public input by holding the meetings so early in
the morning. However, staff reminded the Board that several years ago when the meeting time
was moved to the evening, there was no citizen participation over a six month period.
Mr. Wintters mentioned that he believed that the 6:30 a.m. meetings were better because at that
time, there was little time taken from the Board member's work hours or from Board member's
family time in the evening. He was open to evening meetings if there was a specific request for
the same.
MOTION: A motion was made by Todd Wintters and seconded by Mitch Herzog to
approve the meeting time of 6:30 a.m. on the third Friday of each month for
2013 —2014. The WEDC Board voted 3 —FOR and 0—AGAINST in favor
of the motion.
ITEM NO. 5 — Consider and act upon issues surrounding a Performance Agreement
between the WEDC and Sanden International,(U.S.A.), Inc.
Staff reported that on May 9, 2013, Sanden officials informed the WEDC that the language
within the Performance Agreement was acceptable as presented. Since that time, staff has been
requesting information from Sanden to finalize the Performance Agreement with no response
from Sanden. The information requested is the number of pistons Sanden anticipates producing
each month and an itemized list and associated cost of improvements (including equipment) that
Sanden plans on making to its existing plant. The number of pistons will be used as a
performance measure that the machinery remains `operational'. The itemized list of
improvements and associated cost is required to support the $24 mm impact the piston line will
have on the tax base and to compare that same list to the final support documentation presented
by Sanden after the line is installed.
The last feedback from Sanden officials was on 5-29-13 when staff was informed that the
documentation was available and would be delivered within the next 2—3 business days.
While staff believed there is no urgency to approve the Performance Agreement, the Board may
want to discuss encouraging Sanden to provide the requested documentation by a reasonable date
in order for both Sanden and the WEDC to move forward. While Mr. Herzog was not in favor of
giving Sanden a deadline to provide documentation, Mr. Fuller stated that the incentive would
affect the WEDC Budget and suggested that staff remind Sanden of the WEDC's budget
timeline.
There was no action on the item.
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June 21, 2013
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DISCUSSION ITEMS
ITEM NO. 6—Consider issues surrounding the FY 2013—2014 WEDC Budget.
Staff presented the first draft of the WEDC FY 2013 —2014 Budget for the Board's review.
Revenue Sales Tax—Sales tax receipts through June 2013 are up 15.95% over FY 11 — 12.
Over the last two years, the last half of the fiscal year results in reduced sales tax
receipts with FY 2011 —2012 at only a 2.6% gain. To budget conservatively, the
WEDC and the Finance Department are utilizing a 2.6% factor for the remainder
of the year which projects total sales tax receipts of$1,767,653 or a 10.13% gain
for the year. Again budgeting conservatively, a 5% factor will be used estimating
FY 2013 —2014 sales tax receipts at $1,856,035.
Fund Balance — After completing year end expenditure reports, Mrs. Harris has
estimated remaining expenses from 6/1/13 — 9/30/13 at $1,179,450. With
$330,000 in fixed incentive agreements to fund, there is also the potential for a
$100,000 payment to Sanden prior to the end of the fiscal year and $300,000
estimated in `Land Purchases'. Should either of these expenses not be incurred,
those monies will be shifted into the upcoming fiscal year. Finally, assuming the
Ascend note is refinanced, the Reserved Fund Balance of $441,944 associated
with Ascend will be removed from the financials.
With future sales tax receipts for the remaining year only estimated at an increase
of 2.6% and remaining expenses estimated at $1.179 mm,the WEDC will have an
unreserved beginning fund balance of$1,539,795.
Rental Income — The WEDC has 9 lease spaces with all but one leased. The
facility which is not leased is located at 706 Cooper and is currently being utilized
by Ken Ross, Inc. for additional storage until expansion plans can be finalized.
The remaining 8 lease spaces are currently generating $123,000 annually and all
have stable tenants.
Expenses Compensation — Staff is not proposing any Merit Increase for the Executive
Director or Mrs. Harris at this time but will be making a recommendation in July
pertaining to an increase for Mrs. Harris. Staff is proposing however to shift the
approved Cooper Clinic Executive Physical Program from Special Services to
Personnel Services within the Executive Director's salary. In 2012 the expense
was treated as income with taxes and deductions withheld from the expense in the
amount of 28%. Staff would prefer that this 28% be `grossed up' but will be
continuing the program regardless.
The Board will also note additional monies for an Administrative Assistant
effective on or about January 2014. Mrs. Harris will be retiring in March of 2014
with staff proposing to hire new personnel in January and have Mrs. Harris train
the new WEDC employee. The salary being proposed is $34,715 annually and is
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June 21, 2013
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equivalent in salary to a junior to mid-level administrative assistant working at the
City of Wylie. With the starting amount proposed, there is room to increase the
salary after a probationary period or if a candidate presents themselves with
equivalent skills to the existing Senior Assistant.
Office Supplies—Aerial photography was reduced from$9,000 to $1,000 as fold-
up aerials were produced this year with a two-year shelf life.
Incentives — In FY 2013 — 14, the WEDC will fund existing commitments
estimated at $420,482 to Direct Development, B&B Theatre, Ascend Custom
Extrusions, Clark Street Development, T.W. Snider & Associates, and Sanden
International. Based upon proposed expenses and estimated revenues, the WEDC
will have approximately $1.65 mm at its disposal for unidentified incentive
proposals or land acquisition.
Payments to Direct Development will be reduced from 85% of total sales taxes
generated to 65%. The $184,000 sales tax reimbursement budgeted represents a
10% increase in taxable sales over the prior year actual receipts.
A sales tax reimbursement payment will be made in September 2014 to B&B
Theatre equaling 100% of WEDC receipts for the previous 15 months. Future
reimbursements will be based upon 12 month periods. The WEDC will also be
funding a $25,000 reimbursement incentive following certification by the
Appraisal District of a minimum $10 mm valuation of real and personal property.
Per the existing Performance Agreement between the WEDC and ACE, a third
grant will be funded in July 2013 in the amount of$76,518. Current negotiations
for the Ascend expansion call for that amount to be increased to $100,000, but
only after the completion of the expansion and installation of the third press. The
Board will note the $23,482 expansion incentive will fulfill the $100,000
commitment. Staff anticipates funding and the 4th of 5 payments ($100,000) in
February 2015, approximately 12 months after completion of the proposed
expansion.
The Sanden and Snider grants are consistent with existing and proposed
Performance Agreements with the Clark Street sales tax reimbursement based
upon estimates of future sales at Kroger Marketplace and approximately 17,000
square feet of lease space being constructed.
Special Services — Staff is proposing an increase in Leasehold Improvements
from $5,000 to $10,000 to fund ongoing repairs to WEDC facilities and to
participate in providing power to 212 Industrial Court—B. Staff is also proposing
$7,500 in 'Web Site Development' to upgrade the WEDC website which requires
an update. Finally, staff is proposing an increase to consulting services from
$20,000 to $50,000. Staff must begin the process of master planning the City 19-
acre tract so that Council can be presented with realistic development options. As
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June 21, 2013
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well,the WEDC must begin refreshing redevelopment plans for Cooper Drive and
Industrial Court so that our focus can shift from land acquisition to development.
No significant changes are being proposed for Advertising, Community
Development, Communications, Rental Expense, Travel & Training, Dues,
Insurance, Audit& Legal, Engineering, or Utilities.
Debt Service — The Board will note that Ascend debt service has been removed
from the budget based upon current negotiations and the extension of Woodbridge
Parkway should not move to permanent financing prior to October 2014.
Street & Alleys — The Engineering Department is requesting $60,000 to fund
median improvements to Highway 78 at 5th Street. As discussed in previous
Board meetings, the WEDC will fund the remaining $60,000 required to complete
the improvements benefiting future development on the north side of 78, existing
development south of 78, and promoting redevelopment on the south side of 78 as
well.
Staff had no recommendation at this time but was looking for direction from the Board.
The Board was satisfied with the first draft and deferred further discussion until the July Board
Meeting.
ITEM NO. 6 — Staff Report: review issues surrounding an Amended and Restated
Performance Agreement between the WEDC and Woodbridge Crossing, Performance
Agreement between the WEDC and ACE, Performance Agreement between the WEDC and
B&B Theatres Operating Company, T.W. Snider & Associates, Woodbridge Parkway, and
regional housing starts.
Woodbridge Crossing
The Sales Tax Reimbursement Report was presented which identified all sales taxes received
through March 2013 within Woodbridge Crossing for the City General Fund, the WEDC, and the
4B. As a reminder, the City and WEDC will be reimbursing 85% of all sales tax generated
within Woodbridge Crossing through October 2013 with the reimbursement percentage reduced
to 65% thereafter. Woodbridge Crossing is eligible for a maximum $6 million in sales tax
reimbursement through September 2021.
$1,762,115.51 has been reimbursed to date with net receipts of $1,001,987.26 after
reimbursements. As well, $1.4 mm has been paid in ad valorem taxes to the City of Wylie
(excluding the WISD).
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June 21, 2013
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Ascend Commercial Lease and Performance Agreement
The Ascend Custom Extrusion Critical Dates Analysis and Performance Agreement Monitoring
Procedures were presented. Payment #2 of 5 for the Economic Incentives has been funded with
Ascend meeting all Performance Obligations within Sections A and B.
As reported previously, Ascend ordered a third extrusion press that will be delivered on or about
March 2014. An architect has been hired along with Pulliam Construction Management to
design and construct the proposed 21,000 square foot expansion. Ascend anticipates breaking
ground in August 2013. No further information is available at this time surrounding refinancing
the WEDC note.
B &B Theatres Operating Company Performance Agreement
In June, the WEDC will begin receiving a Sales Tax Area Report from the Comptroller which
will track taxable sales generated from the Wylie B&B Theatre. As per the attached B&B
Theatre Performance Obligations summary, the WEDC will fund Incentive No. 2 of $25,000
plus sales tax reimbursements following the certification by the Central Appraisal District of a
minimum appraised value of $10 mm. Being that the WEDC began tracking the sales tax
generated in April 2013; the first sales tax reimbursement from the WEDC/City of Wylie will be
made up of 16 months of sales tax generated by B&B opposed to the initial 12 month period
contemplated in the Agreement. Incentive No. 3, to be paid in September 2015, will reflect 12
months of sales taxes generated.
T. W. Snider&Associates
On October 9, 2012 the WEDC entered into an amended Performance Agreement with T.W.
Snider & Associates which among other things requires Snider to receive a Shell Final (CO) for
a 4,800 square foot office (Phase II) and the development of 17 additional parking spaces within
Snider's existing development. Should the above improvements be completed by November 1,
2013,the WEDC will fund a$45,000 grant.
Mr. Snider has completed soil preparation of the site and should begin the plumbing rough-in on
or about June 17th
Woodbridge Parkway
The Engineering Department was able to finalize all right-of-way acquisition for the extension of
Woodbridge Parkway. Utility relocation should begin within the next 30 days.
Regional Housing Starts
Twenty-two homes were permitted in Wylie for May 2013. Sachse, Lavon, and Murphy
permitted a combined twenty-six homes over the same period.
No action is requested by staff for this item.
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June 21, 2013
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EXECUTIVE SESSION
The WEDC Board recessed into Closed Session at 7:16 a.m. in compliance with Section 551.001
et.seq. Texas Government Code to wit:
Section 551.087 (Economic Development) of the Local Government Code, Vernon's Texas
Code Annotated(Open Meetings Act).
• Project 2013-5b
• Project 2013-5c
• Project 2013-5d
• Project 2013-6a
Section 551.072 (Real Estate) of the Local Government Code, Vernon's Texas Code Annotated
(Open Meetings Act).
• F.M. 544 and Regency
• State Highway 78 and Ballard
• F.M. 544 & Commerce
Ex-Officio Member Mindy Manson left the meeting at 8:06 a.m.
RECONVENE INTO OPEN MEETING
The WEDC Board of Directors reconvened into open session at 8:41 a.m. and took no action.
ADJOURNMENT
With no further business, President Fuller adjourned the WEDC Board meeting at 8:41 a.m.
Marvin Fuller, President
ATTEST:
Samuel Satterwhite,Director