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05-08-2006 (WEDC) Minutes Wylie Economic Development CORPORATION Minutes Wylie Economic Development Corporation Board of Directors Meeting Monday, May 8, 2006 —6:00 A.M. Inwood National Bank— Conference Room 200 South Highway 78 —Wylie, Texas CALL TO ORDER Announce the presence of a Quorum. President Fuller called the meeting to order at 6:00 a.m. Board Members present were: Gary Bartow (departed at 8:30 a.m.), John Yeager, Merrill Young (departed at 7:45 a.m.), and Mitch Herzog. Staff present was: Executive Director Sam Satterwhite. CITIZEN PARTICIPATION There being no citizen participation, President Fuller proceeded to Discussion Items. DISCUSSION ITEMS ITEM NO. 1 - Discuss Issues Surrounding the City Auditor's Comprehensive Annual Financial Report, Management Letter, and a Memorandum from the City's Finance Director. The Board was informed that staff contacted Mr. David Medanich, Vice Chairman of First Southwest Company, to request an analysis of the requests for proposals and bids for the purchase of the Ferrell tracts, Martinez tracts, and associated improvements to the Martinez tracts. As recommended by the Finance Director in a memorandum attached to City Auditor's Management Letter, the WEDC should utilize a third party to develop bid sheets and analyze responses when going out for bid to enter into debt. Based upon this recommendation and in order to review the process undertaken during the RFP process and subsequent response analysis, staff requested Mr. Medanich's input. Staff pointed out that it did not indicate which type of rate (fixed or variable) the WEDC Board favored and did not indicate which financial institution received the bid. WEDC—Minutes May 8, 2006 Page 2 of 8 Mr. Medanich stated in his letter dated April 28, 2006, that "both bidder appear to abide by the spirit of the RFP, however either Bank could prevail with the lowest bid based on the desire of either a fixed rate obligation or variable rate obligation as determined by the Corporation. Inwood seems to have the more favorable fixed rate and American National the more favorable variable rate "Mr. Medinich did recommend that in the future the WEDC reduce the number of variable, identify a specific term, payment, call provisions, and identify the tax-exempt status on the obligation. In contacting First Southwest, staff made no mention of which financial institution was chosen or which type of rate the WEDC Board of Directors preferred (fixed or floating). The response from First Southwest is provided for your review. The Board directed staff to forward Mr. Medanich's response to the Wylie City Council for their review. ITEM NO. 2 - Discuss Issues Surrounding a Real Estate Sales Contract Between James L. Hughes and the Wylie Economic Development Corporation (WEDC). Staff presented the executed real estate contract between James L. Hughes and the WEDC. Also presented was the Commitment for Title Insurance and the survey completed 4/26/06. Staff indicated that it will be seeking authorization from the Wylie City Council to enter into debt in the purchase of the Hughes tract on May 23, 2006. Key issues to be addressed in the presentation to the Wylie City Council are as follows: ➢ Protect further industrialization of State Highway 78 corridor; > Promote new, commercial development along 78 corridor and the Industrial Court area; > Prepare for the redevelopment of corridor from Shafer Plaza north; > Impact of the additional debt service on the WEDC 2006—2007 Budget; and > Have inventory of WEDC owned facilities, with potential lease subsidies, for small businesses to utilize until prepared to build own facility. President Fuller inquired as to the status of the Collin County right-of-way fronting State Highway 78. Staff responded that Mr. Hughes will close on the property within the next thirty days and convey the site to the WEDC at his cost. Mr. Young requested that staff pursue rolling the County land into the financing provided by Mr. Hughes. Staff also informed the Board that a local company is very interested in expanding its operations into one of the two buildings located on the Hughes site. WEDC—Minutes May 8, 2006 Page 3 of 8 ACTION ITEMS ITEM NO. 1 - Consider and Act Upon Approval of the April 3, 2006 Minutes of the WEDC Board of Directors Meeting. President Fuller indicated that Mr. Williamson was not present at the April 3, 2006 WEDC Board meeting. Staff added that there was an incorrect reference within Item No. 4. The minutes read that "the Money Market Account was established to replace an account held at American National Bank earning 0.5%." The suggested correction by staff was that the Money Market Account was established to receive proceeds from the Shafer sale. Funds held at an American National Bank Money Market account were subsequently transferred to the Inwood account based upon the ANB account earning approximately 0.5% in February, 2005. President Fuller also requested that the following paragraph be amended to read: Having been previously informed by the Finance Director MOTION: A motion was made by Gary Bartow and seconded by John Yeager to approve the April 3, 2006 Minutes of the WEDC Board of Directors Meeting as amended. The WEDC Board of Directors voted 5 —FOR and 0—AGAINST in favor of the motion. ITEM NO. 2 - Consider and Act Upon Approval of the April 25, 2006 Minutes of the WEDC Board of Directors Meeting. In reviewing the April 25, 2006 WEDC minutes, Mr. Herzog requested that the WEDC Board contemplate not having the same attorney in the future. Mr. Herzog emphasized that the City Attorney acknowledged the fact that if the City and WEDC were to disagree over a legal opinion/issue; the City Attorney is obligated to represent the City first. While President Fuller believed that the City and WEDC will always be able to work out any differences prior to resorting to legal action, it was requested that staff bring this issue back to the WEDC Board as a Discussion Item in the near future. MOTION: A motion was made by Merrill Young and seconded by John Yeager to approve the April 25, 2006 Minutes of the WEDC Board of Directors Meeting. The WEDC Board of Directors voted 5 — FOR and 0—AGAINST in favor of the motion. ITEM NO. 3 - REMOVE FROM TABLE: Consider and Act Upon Approval of the February,2006 WEDC Treasurer's Report. MOTION: A motion was made by Merrill Young and seconded by John Yeager to remove from the table consideration of the February, WEDC—Minutes May 8, 2006 Page 4 of 8 2006 WEDC Treasurer's Report. The WEDC Board of Directors voted 5 —FOR and 0—AGAINST in favor of the motion. Staff presented the Balance Sheet which was missing from the last presentation of the February, 2006 WEDC Treasurer's Report. Staff informed the Board that entries made in reference to the Heath and McMaster's tracts and a note payable to the Birmingham Land Trust will not be shown until the May report. As well, the May report will reflect a reduction in the note payable to Inwood National Bank. Currently, the Balance Sheet reflects a note payable of$1,028,372. The current obligation to Inwood is approximately $860,000 with total funds to be borrowed at $1,028,372. The difference represents monies to be utilized to make improvements to the Martinez tract. Finance staff did not believe that audit entries/adjustments would be retroactive to past Treasurer's Reports. President Fuller instructed staff to request a memo from Finance indicating such. Staff also presented a more detailed version of the WEDC Executive Director Expense Report. President Fuller indicated that staff should provide even more detail on the purpose of the expense as the reports are presented to Council. President Fuller also presented staff with an Investor Overview from NFC Sports. NFC Sports is working closely with Mr. Don Herzog to develop a sports complex on the Jones tract. The Board also requested that a forgiveness schedule for the Bayco and Jacoby projects be presented during the June Board meeting. MOTION: A motion was made by Merrill Young and seconded by Gary Bartow to approve the February, 2006 WEDC Treasurer's Report. The WEDC Board of Directors voted 5 —FOR and 0 —AGAINST in favor of the motion. ITEM NO. 4 - Consider and Act Upon Approval of the March, 2006 WEDC Treasurer's Report. MOTION: A motion was made by Gary Bartow and seconded by John Yeager to approve the March, 2006 WEDC Treasurer's Report. The WEDC Board of Directors voted 5 — FOR and 0 - AGAINST in favor of the motion. ITEM NO. 5 - Consider and Act Upon the Establishment of Regularly Scheduled WEDC Board of Directors Meetings. Staff suggested that the WEDC establish a regularly scheduled meeting time and date to allow the opportunity for increased citizen participation. Staff commented that the WEDC has been meeting at 7:00 a.m. or earlier on an as needed basis for the past 6 — 7 WEDC—Minutes May 8, 2006 Page 5 of 8 years with no complaints from any citizen. The consensus of the Board was to continue meeting in the Conference Room at Inwood National Bank. Staff recommended the first Thursday of each month at 6:00 p.m. Board member Yeager commented that prior month financial statements will not be available at this time and suggested the third Thursday of each month beginning in June. MOTION: A motion was made by John Yeager and seconded by Mitch Herzog establishing the third Thursday of each month at 6:00 p.m. as the regularly scheduled date and time for WEDC Board Meetings. The WEDC Board of Directors voted 5 —FOR and 0 — AGAINST in favor of the motion. ITEM NO. 6 - Consider and Act Upon Issues Surrounding a Commercial Lease Between the WEDC and The Green Sculptor(706 Cooper Drive). Staff indicated to the Board that since the purchase of the property located at 706 Cooper Drive by the WEDC, The Green Sculptor has been leasing the facility from the WEDC under a verbal agreement of$400 per month plus utilities. The verbal agreement was a continuation of the agreement with Bob Heath and Dick Sharman. The building area is 3,624 square feet. The Green Sculptor is occupying approximately 2,880 square feet. The remaining 744 square feet can be utilized by the WEDC or City of Wylie for storage. Staff presented two different scenarios under which a $650 monthly lease rate is established and a second under which a $720 monthly lease rate is established. Factors utilized in staffs analysis were the existing market for warehouse space,property taxes to be incurred by the WEDC, lack of off-street parking, opportunity cost for interest not earned, and the potential for having to identify another tenant or the property remaining vacant. The Board directed staff to attempt to negotiate a $720 per month lease while also giving staff the authority to go as low as $650 per month. MOTION: A motion was made by John Yeager and seconded by Gary Bartow approving a Commercial Lease between the WEDC and The Green Sculptor, further authorizing President Fuller to execute said lease. The WEDC Board of Directors voted 4 — FOR and 0 —AGAINST in favor of the motion. ITEM NO. 7 - Consider and Act Upon the Establishment of an Administrative Assistant Position within the WEDC. Staff identified that the WEDC is currently funding $13,231 for the shared use of a 32- hour per week Secretary I position. As discussed in previous Board meeting and most WEDC—Minutes May 8, 2006 Page 6 of 8 recently in the April 25, 2006 Work session with the WEDC and Wylie City Council, staff is recommending the creation of a new administrative position within the WEDC. The fiscal impact of a 32-hour position is $26,231 while a full time position is $38,780. Both Mr. Bartow and Mr. Herzog indicated that $12,549 difference between full and part time is minor compared with the ability to have assistance 5 days per week. While staff indicated that a 32-hour position would most likely meet the current staffing needs, the Board advised staff to not get back into a situation where the lack of organization impacts the organizations credibility as with past minutes not being completed. While the Board approved of the 32-hour position, but authorized up to a full time position, encouraging staff to consider carefully the current and future administrative needs of the WEDC. MOTION: A motion was made by Gary Bartow and seconded by John Yeager authorizing staff to create a new Secretary I position reporting to the WEDC. The WEDC Board of Directors voted 4 — FOR and 0 —AGAINST in favor of the motion. ITEM NO. 8 - Consider and Act Upon Issues Surrounding the Physical Location of WEDC Offices. Mr. Herzog excused himself from discussion of the above issue citing a conflict of interest. One of the office spaces being presented as a potential site for WEDC offices is owned by Mr. Herzog's employer. Staff presented four different locations as potential sites for WEDC offices. Staff believed the current need for office space is between 1,200 and 1,500 square feet. Cost options ranged from $1,300 to $2,800 per month. President Fuller instructed staff to determine what Mr. Bob Heath is leasing the Spirit Shop for on 78 and what the old Inwood building will be leased for downtown. MOTION: A motion was made by John Yeager and seconded by Gary Bartow to table issues surrounding the physical location of WEDC offices. The WEDC Board of Directors voted 3 — FOR and 0 —AGAINST in favor of the motion with Mr. Herzog abstaining. ITEM NO. 9 - Consider and Act Upon Issues Surrounding a WEDC Promotional Expenditures Policy. With only three Board members present, President Fuller recommended that all remaining Action Items be tabled so that full review by the Board could take place. President Fuller directed staff to schedule a Board meeting at the earliest date possible to consider the remaining Action Items. WEDC—Minutes May 8, 2006 Page 7 of 8 MOTION: A motion was made by John Yeager and seconded by Mitch Herzog to table issues surrounding a WEDC Promotional Expenditures Policy. The WEDC Board of Directors voted 3 FOR and 0—AGAINST in favor of the motion. ITEM NO. 10 - Consider and Act Upon Issues Surrounding a WEDC Financial Standards and Accountability Policy. MOTION: A motion was made by John Yeager and seconded by Mitch Herzog to table issues surrounding a WEDC Financial Standards and Accountability Policy. The WEDC Board of Directors voted 3 —FOR and 0—AGAINST in favor of the motion. ITEM NO. 11 - Consider and Act Upon Approval of the January 20, 2005 Minutes of the WEDC Board of Directors Meeting. MOTION: A motion was made by John Yeager and seconded by Mitch Herzog to table approval of the January 20, 2005 Minutes of the WEDC Board of Directors Meeting. The WEDC Board of Directors voted 3 —FOR and 0—AGAINST in favor of the motion. ITEM NO. 12 - Consider and Act Upon Approval of the February 2, 2005 Minutes of the WEDC Board of Directors Meeting. MOTION: A motion was made by John Yeager and seconded by Mitch Herzog to table approval of the February 2, 2005 Minutes of the WEDC Board of Directors Meeting. The WEDC Board of Directors voted 3 —FOR and 0—AGAINST in favor of the motion. ITEM NO. 13 - Consider and Act Upon Approval of the March 21, 2005 Minutes of the WEDC Board of Directors Meeting. MOTION: A motion was made by John Yeager and seconded by Mitch Herzog to table approval of the March 21, 2005 Minutes of the WEDC Board of Directors Meeting. The WEDC Board of Directors voted 3 -FOR and 0—AGAINST in favor of the motion. ITEM NO. 14 - Consider and Act Upon Approval of the May 6,2005 Minutes of the WEDC Board of Directors Meeting. MOTION: A motion was made by John Yeager and seconded by Mitch Herzog to table approval of the May 6, 2005 Minutes of the WEDC Board of Directors Meeting. The WEDC Board of Directors voted 3 —FOR and 0—AGAINST in favor of the motion. WEDC—Minutes May 8, 2006 Page 8 of 8 EXECUTIVE SESSION The WEDC Board of Directors convened into Executive Session at 8:40 a.m. ITEM NO 1 - Convene into Executive Session to Hold Deliberations Regarding Real Property (Purchase of Real Property by the WEDC Located at 707 Cooper Drive and Property Located Near the F.M. 544/F.M. 1378 Intersection) as Authorized in Section 551.072 of the Local Government Code, Vernon's Texas Code Annotated (Open Meetings Act). ITEM NO. 2 - Convene into Executive Session to Hold Deliberations Regarding Economic Development Negotiations (offer of financial incentives to `Company A', `Company B', and `Company C') as Authorized in Section 551.087 of the Local Government Code, Vernon's Texas Code Annotated (Open Meetings Act). RECOVENE INTO OPEN MEETING The WEDC Board of Directors reconvened into open session at 8:43 a.m. No action was taken as a result of discussion held in Executive Session. ADJOURNMENT With no further business, President Fuller adjourned the WEDC Board meeting at 8:44 p.m. Consensus of the WEDC Board was to adjourn. g474,vy Marvin Fuller, President ATTEST: <„,444,27:a./7 Alb Samuel D.R. Satterwhite Executive Director