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12-20-2007 (City Council) Minutes ?A( Wylie City Council CITY OF WYLIE Minutes Wylie City Council Special Called Meeting Tuesday, December 20, 2007 —6:00 pm Wylie Municipal Complex — Council Chambers 2000 Highway 78 North CALL TO ORDER Announce the presence of a Quorum. Mayor Mondy called the meeting to order at 6:30 p.m. Council Members present were: Mayor Pro Tern Red Byboth, Councilwoman Kathy Spillyards, Councilman David Goss, Councilman Rick White, Councilman Merrill Young and Councilman Carter Porter. Staff present were: City Manager, Mindy Manson; Assistant City Manager, Jeff Butters; City Engineer, Chris Hoisted; Wylie Economic Development Corporation Executive Director, Sam Satterwhite, and City Secretary, Carole Ehrlich. INVOCATION & PLEDGE OF ALLEGIANCE Mayor Pro Tern Byboth gave the invocation and Councilwoman Spillyards led the Pledge of Allegiance. REGULAR AGENDA Public Hearing 1. Hold a Public Hearing to hear evidence for or against the taxation of certain tangible personal property held temporarily within the City of Wylie, Texas. (S. Satterwhite, WEDC Executive Director) Staff Comments WEDC Executive Director Satterwhite addressed Council stating that In the 2007 session, the Texas Legislature passed HB621 which amends the Texas Tax Code, Section 11.253. The bill is very similar to the Freeport exemption passed many years ago, but has potentially larger impact as time goes on. The Minutes— 12-20-07 Special Called Meeting Wylie City Council Page 1 City of Wylie has not passed the Freeport exemption and continues to tax goods in transit, which is primarily inventory of companies such as Sanden International, Bayco Products, Carlisle Coatings & Waterproofing, and Extruders division of Atrium Companies, Inc. HB 621 exempts goods, principally inventory, that are stored in a location that is not owned by the owner of the goods and transferred from that location to another location within 175 days. He explained that to continue taxing these goods, the City of Wylie must hold a public hearing to determine whether the subject goods become exempt. Failure to act to tax these goods will allow them to become exempt for the 2008 tax year. He explained that a mild opinion had come from the Texas Attorney General stating that if it was found that a company was moving inventory solely to eliminate paying taxes, the AG would not allow the exemption however, Mr. Satterwhite reiterated that the best way to insure this was to hold a public hearing and pass an ordinance to tax the inventory. He reported that the Council, at any time, could come back and choose to exempt any property on an individual basis. Mayor Mondy asked Mr. Satterwhite to explain the Freeport Tax. Mr. Satterwhite explained that there were two; the Freeport Tax and the Super Freeport Tax. He explained that the Council had voted some time ago to not tax those goods that come to a company and then leave the State within 175 days. He reported that the Freeport exemption is very broad and applies to many types of goods whether their owned by the entity or not or whether they are housed in a facility owned by the entity or not. He explained that at some point this Council or a future Council will want to consider the areas near the railroad tracks as certain exemptions may be warranted because Council will be considering hundreds of millions of dollars in inventory; in order to develop a tract like that, Council will need to at least consider some Freeport Exemptions. in order to develop that area. He explained that most of the neighboring entities that are aggressively developing these tracts are doing so. Mayor Pro Tern Byboth asked Mr. Satterwhite how the boundary for this tax was defined. Mr. Satterwhite replied that the boundary for taxation was based on the incorporated City limits. Public Hearing Mayor Mondy opened the Public Hearing regarding the Freeport Exemption at 6:31 p.m. No one was present to address Council on this item. Mayor Mondy closed the Public Hearing at 6;32 p.m. General Business 2. Consider, and act upon, Ordinance No. 2007-44 to tax tangible personal property which would otherwise be exempt pursuant to Texas Tax Code, Section 11.253. (S. Satterwhite, WEDC Executive Director) Staff Comments WEDC Executive Director Satterwhite addressed Council explaining that In 1999, the Wylie Economic Development Corporation (WEDC) chose to recommend to the City Council against approving the Freeport Exemption within the City of Wylie based upon the lack of interest in exempting the existing Freeport value at the time of $31.7 million. Staff is unaware of what the current Freeport valuation is at this time. HB 621 amended the Texas Tax Code, Section 11.253 allowing the exemption from taxation inventory goods stored in a location that is not owned by the owner of the goods and are transferred from that location to another location within 175 days. The City Council may act to tax these goods in the year following the year which the Council takes action. To continue to tax these type goods, Council must act in such a manner prior to December 31, 2007. Minutes— 12-20-07 Special Called Meeting Wylie City Council Page 2 Council Action - A motion was made by Councilman Young, seconded by Mayor Pro Tern Byboth to approve Ordinance No. 2007-44 to tax tangible personal property which would otherwise be exempt pursuant to Texas Tax Code, Section 11.253. A vote was taken and passed 7-0. READING OF ORDINANCES Title and caption approved by Council as required by Wylie City Charter, Article III, Section 13-D. City Secretary Ehrlich read the captions to Ordinances No. 2007-44 into the official record. Mayor Mondy recessed into Executive Session at 6:36 p.m. reading the exception as follows: EXECUTIVE SESSION Recess into Closed Session in compliance with Section 551.001, et.seq. Texas Government Code, to wit: §§551.087 Deliberations regarding economic development negotiations. To discuss commercial or financial information that the governmental body has received from a business prospect that the governmental body seeks to have locate, stay or expand in or near the territory of the governmental body and with which the governing body is conducting economic development negotiations. • Discussion regarding economic negotiations with Direct Development Mayor Mondy reconvened into Open Session at 8:10 p.m. RECONVENE INTO OPEN SESSION Take any action as a result from Executive Session, including but not limited to: Staff Comments The City Council reconvened into open session at 7:45. Sam Satterwhite reviewed the proposed Letter of Intent regarding the retail development known as Woodbridge Crossing, stating that it included a cap of a $12 million sales tax reimbursement to Direct Development over a period not to exceed 12 years. The reimbursement would be generated from 85% of the City's one cent sales tax and 85% of the WEDC % cent sales tax generated by Woodbridge Crossing in years 1 - 4, and a 65% reimbursement from both entities in years 5 - 12. In return Direct Development will develop McCreary Road from FM 544 to Maxwell Creek Road adjusting the signalization; the portion of Springwell Parkway south of FM 544 adjacent to the property including a signal light; an additional signal light at the mid-point of the property. Direct Development will develop a 530,000 square foot retail complex in Phase I, with the ultimate build-out of 575,000 square feet. Minutes— 12-20-07 Special Called Meeting Wylie City Council Page 3 3. Consider, and act upon, the acceptance of a Letter of Intent from Direct Development relating to the proposed retail development on FM 544. (M. Manson, City Manager) Council Action A motion was made by Mayor Pro Tern Byboth, seconded by Councilman Porter to authorize the Mayor to sign the Letter of Intent. A vote was taken and the motion passed 7 —0 by a show of hands. ADJOURNMENT With no further business before Council, Mayor Mondy adjourned the meeting at 7:51 p.m. Consensus of Council was to adjourn. John Mon y, Mayor ATTEST: ,�`����y O • wy�j�' SEAL Caro a Ehrlich, ity Secretary Minutes— 12-20-07 Special Called Meeting Wylie City Council Page 4