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07-31-2017 (WEDC) Minutes Minutes Wylie Economic Development Corporation Board of Directors Meeting Monday, July 31, 2017—5:30 P.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 at 5:31 p.m. Board Members present were John Yeager, Todd Wintters, Demond Dawkins and Bryan Brokaw. Ex-officio members Mayor Eric Hogue and City Manager Mindy Manson were present. WEDC staff present was Executive Director Sam Satterwhite and Senior Assistant Angel Wygant. CITIZEN PARTICIPATION Lynn Grimes was present and informed the Board that a new business, Angel's Deli, had opened in a newly restored home in downtown Wylie. With no further citizen participation, President Fuller proceeded to Action Items. ACTION ITEMS ITEM NO. 1 — Consider and act upon approval of the July 12, 2017 Minutes of the Wylie Economic Development Corporation (WEDC) Board of Directors Meeting. MOTION: A motion was made by John Yeager and seconded by Todd Wintters to approve the July 12, 2017 Minutes of the Wylie Economic Development Corporation as amended. The WEDC Board voted 5 — FOR and 0—AGAINST in favor of the motion. ITEM NO. 2—Consider and act upon approval of the July 2017 WEDC Treasurers Report. Staff reviewed the financials and informed the Board that on July 12, 2017, the WEDC made a $1,000,000 payment to Loan 88157334 to reduce the Principal balance of that loan. MOTION: A motion was made by Todd Wintters and seconded by John Yeager to approve the July 2017 WEDC Treasurers Report. The WEDC Board voted 5 —FOR and 0—AGAINST in favor of the motion. ITEM NO. 3 — Consider and act upon the First Option to Renew and Extend American National Bank Loan No. 88157334. Attached for the Board's review was the Loan Agreement with American National Bank of Texas (ANB), Loan number 88157334. This loan matures on September 23, 2017 and contains provisions for 3 opportunities to Renew and Extend under the same terms contained in the original agreement. Staff reiterated that exercising this Option to Renew and Extend adjusts the maturity WEDC—Minutes July 31, 2017 Page 2 of 5 date of the loan by one year to September 23, 2018. Should the Board decide not to exercise the Option to Renew and Extend, the remaining balance of approximately $522,373 will be due on September 23, 2017. As previously mentioned, on July 12th the WEDC made a principal reduction payment of $1,000,000 to the above referenced loan. President Fuller indicated that there was language within the agreement indicating an interest rate adjustment associated with the Option to Renew and Extend. Staff commented that it was his understanding in speaking with the ANB Loan Officer that the terms were identical in relation to the current interest rate going forward but indicated that Mr. Fullers identification of the floating rate is contrary to the current recommendation of extending the loan for 12 months at 4%. The Board directed staff to clarify the rate and specified that current consideration is based upon a 4%rate. MOTION: A motion was made by Demond Dawkins and seconded by Bryan Brokaw to exercise the Option to Renew and Extend Loan Agreement Number 88157334 for one year under the same terms and interest rate currently in effect. The WEDC Board voted 5 —FOR and 0 —AGAINST in favor of the motion. EXECUTIVE SESSION Recessed into Closed Session at 5:42 p.m. in compliance with Section 551.001, et.seq. Texas Government Code, to wit: Section 552.071 of the Texas Government Code (Consultation with Attorney)Consultation with attorney regarding a matter in which the duty of the attorney to the WEDC under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with the Open Meetings Act regarding: • Possible review by governmental agency RECONVENE INTO OPEN MEETING The WEDC Board of Directors reconvened into open session at 6:03 p.m. and took no action. ITEM NO. 4 —Consider and act upon approval of the FY 2017-2018 Budget. Staff presented an overview of the attached detailed budget. As reported to the Board, following the first two work sessions the Finance Department determined that the WEDC Beginning Fund Balance as of 10-1-17 had been overstated by $1.2mm. It was determined that there was an error made by staff in calculating total available resources for FY 2017 — 2018. Due to this overstatement of Beginning Fund Balance, staff was required to make multiple reductions in expenditures. On the revenue side, staff had utilized a conservative$20 psf for the sale of a WEDC lot, but amended that figure to a more realistic $23 psf resulting in a$205,000 increase in potential revenue. r . WEDC—Minutes July 31, 2017 Page 3 of 5 On the expense side, staff proposed the following reductions: • Leasehold improvements reduced by$5,000 • Misc. Engineering/Architect reduced by $2,500 • Furniture & Fixtures reduced by $1,500 • New copier removed from budget- $8,300 • Incentives—Future Projects reduced from $917,565 to $753,900—net$163,665 • Debt Service—Principal Reduction amended from $1.727mm to $1.2mm—net $527,000 • Land acquisition reduced by $350,000 Looking forward to FY 2017-2018, one-time incentive expenditures and expiring incentive programs will reduce fixed expenditures by $304,800. Further the sale of a WEDC pad side will reduce annual debt service by $381,288. Staff recommended that the Board of Directors approve the FY 2017-2018 WEDC Budget as presented. President Fuller asked that the Board to delay further consideration until after Executive Session in order to accommodate any changes the Board might make relating to staff/salary evaluations. ITEM NO. 5—Consider and act upon issues surrounding the election of WEDC Officers. The Wylie City Council recently reappointed Mr. Todd Wintters to a three-year term as a Member of the Wylie Economic Development Corporation Board of Directors. Mr. Wintters has been sworn in by the City Secretary's office. 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- Ocers of the WEDC By-laws. Section V provides for the selection of officers and the duties of the same. In 2016 the WEDC Board of Directors elected the current officers: Marvin Fuller President Todd Wintters Vice President John Yeager Secretary Demond Dawkins Treasurer Bryan Brokaw Board Member Staff recommended that the WEDC Board of Directors elect officers for the upcoming year. President Fuller informed the Board that, after much consideration, he felt it was in the best interests of the WEDC Board that he step aside from an Officer role on the Board and allow another Board Member to fill the position of Board President. Without exception, all Board Members felt that the Board was best served by the experience and leadership of Mr. Fuller and despite the negative publicity directed toward staff and Mr. Fuller specifically, the slate of Officers for the WEDC—Minutes July 31, 2017 Page 4 of 5 WEDC Board of Directors needed to remain as is. Ex-officio member Mayor Hogue thanked Mr. Fuller for his outstanding service and reminded him that he has the full support and confidence of Council to remain in his role as President of the WEDC Board of Directors. Mr. Fuller thanked the Board for their confidence in him but requested the Board consider a change. Board Member Brokaw commented that should he be asked to be an officer now or any time in the future,he could not take on the role of Treasurer due to professional restrictions from his company. MOTION: A motion was made by John Yeager and seconded by Todd Winners to Table this item until the next Regular Board Meeting keeping the current slate of Officers in place in the interim. The WEDC Board voted 5 —FOR and 0—AGAINST in favor of the motion. DISCUSSION ITEMS ITEM NO. 6— Staff report: Staff reviewed issues surrounding WEDC Performance Agreement Summary, Environmental Activity Summary, Highway 78 WEDC Pad Sites, 544 Gateway Property, LaQuinta Inn& Suites, Holiday Inn Express, and regional housing starts. Staff reviewed the above items and informed the Board that discussion with LaQuinta revealed they are anticipating a September opening. In addition, confidence is high that the Holiday Inn Express would be open by December 31, 2017. No action was requested by staff for this item. ITEM NO. 7 — Discussion of issues to be placed on future WEDC Board Meeting agenda (no substantial consideration/discussion allowed). No Board Members requested than an item be placed on future agendas. Mayor Hogue left at 6:48 p.m. and returned at 6:50 p.m. Demond Dawkins left at 6:50 p.m. EXECUTIVE SESSION Recessed into Closed Session at 6:50 p.m. in compliance with Section 551.001, et.seq. Texas Government Code, to wit: 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 near the intersection of: • Cooper&Hwy 78 • Oak& Jackson • Steel &Regency • Brown& Hwy78 • F.M. 544 & Birmingham WEDC—Minutes July 31, 2017 Page 5 of 5 Section 551.087 (Economic Development) of the Local Government Code, Vernon's Texas Code Annotated (Open Meetings Act). • Project 2016-10a • Project 2017-la • Project 2017-7a • Project 2017-7b 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 RECONVENE INTO OPEN MEETING The WEDC Board of Directors reconvened into open session at 8:11 p.m. and took the following action: ITEM NO. 4—Consider and act upon approval of the FY 2017-2018 Budget. Following Executive Session, the Board amended FY 2017 - 2018 Budget (Personnel)to reflect a 5% increase in Personnel. The Board directed staff to increase Personnel by 5% and to make the necessary adjustments to Future Projects within Incentives to offset these changes. MOTION: A motion was made by Bryan Brokaw and seconded by John Yeager to approve the FY 2017 - 2018 Budget as amended to reflect a 5% increase in Personnel. The WEDC Board voted 4 — FOR and 0 — AGAINST in favor of the motion. ADJOURNMENT With no further business, President Fuller adjourned the WEDC Board meeting at 8:14 p.m. 4/14 hirto Marvin Fuller, President ATTEST: Samuel Satterwhite, Director