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09/20/2016 MINUTESPARIS ECONOMIC DEVELOPMENT CORPORATION MONTHLY MEETING Paris City Council Chambers 107 East Kaufman St. Paris, Texas 75460 Tuesday, September 20, 2016 4:00 O'CLOCK P.M. Board Members Present: Richard Manning, Chairman John Brockman, Vice -Chair Don Wilson, Secretary /Treasurer Ray Banks Derrick Hughes Ex- Officio Members Present: Dr. Pam Anglin, PJC President Stephen Gerrald, Chamber of Commerce John Godwin, City Manager Legal Counsel: Stephanie Harris, City Attorney Call to Order. MINUTES Staff Present: Michael Paris, Executive Director Paula Brownfield, Administrative Assistant Chris Stout, Office Assistant Guest(s) Present: Amanda Gohn, The Paris News Colton Sanders, Paris Free Press Ken Higdon, Chamber of Commerce President City Council Liaison: None Mr. Manning called the meeting of the Paris Economic Development Corporation to order at 4:00 p.m. on September 20, 2016. Citizens' Input Mr. Manning asked if anyone wanted to speak during the Citizen's Input. Stephen Gerrald came forward to let the Board know that his time as Chairman of the Lamar County Chamber of Commerce was ending; and after this meeting he would not be the Chamber's Ex- Officio on the PEDC Board. The Chamber's new Chairman, Jeff Martin, asked that Ken Higdon step -in as the Chamber's Ex- Officio. Mr. Gerrald thanked the Board for the work they are doing and stated that he appreciated the time he served as an Ex- Officio. The PEDC Board thanked Mr. Gerrald for serving with them. Mr. Manning asked for more Citizens' Input. No one came forward and the Citizens' Input was closed. Discuss and possibly approve Minutes of the August 16, 2016, Monthly Meeting and the August 23, 2016, Special Meeting. Mr. Manning asked if there were any corrections or changes to the minutes of both August 16th and August 23rd. Mr. Banks made a motion to accept the minutes as presented. Mr. Hughes seconded the motion. The vote was 5 -ayes to 0 -nays. PEDC Board Meeting Minutes September 20, 2016 Page 2 of 5 Discuss and possibly approve August 2016 Financials. Mr. Wilson asked for any comments or questions about the August financials. He asked that everyone turn to the Cash Flow Analysis. The unencumbered reserves are $2,468,642.00. The I &S and Reserves has a balance of $708,294.00; which this month has gone down because the bond payment of $335,110.50 has been paid. Mr. Banks asked if it was the final bond payment and Mr. Wilson replied that there would be one more year to pay on the bond payments. He also added that there would be another year on the bond payments, but that year has been prepaid. Mr. Wilson went through the sales tax figures over that last few years to gauge the amount of sales tax income the PEDC could anticipate this coming year. The handout showing a Tax Income of $1,380,000.00 at the bottom of the Budget figures is what we are estimating for income. This would leave us an estimated surplus of $159,692.00. Mr. Brockman made the motion to approve the August 2016 Financials. Mr. Banks seconded the motion. The vote was 5 -ayes to 0 -nays. Discuss and possibly approve final budget amendments to the 2015 -2016 Budget. Mr. Wilson discussed the final budget amendments we would send to City Council. These amendments move money inside the budget just to be sure that there are no negative numbers in any line items. The spreadsheet shows that we are asking Mr. Anderson to take $17,000 out of the Contract Labor line and add it to the Depot Operations line that was negative. Also, we are taking $9,000.00 out of the Contract Services -Legal Fees line and putting $7,000.00 in the Salaries line and $2000.00 in the Social Security line to make sure they are both positive numbers. Mr. Banks made a motion to approve the final amended 2015 -2016 budget. Mr. Hughes seconded the motion. The vote was 5 -ayes to 0 -nays. Discuss and possibly vote to proceed with obtaining approval from Paris City Council to expend PEDC funds from its undesignated fund balance to finance the construction of the building at 2305 NW Loop 286. (According to the PEDC Bylaws, Section 4.12.) Mr. Paris stated that due diligence has been done. Bobby Smallwood Construction is a very good company and has done some excellent work in our community. Included in the Agenda Packet are Bobby Smallwood Construction's bid, the bid proposal with references, and the building plans. Two details left out of the Request for Bids were the surety insurance or a bid bond and builders' risk insurance. Mr. Smallwood was asked what the extra cost would be for both types of insurance; the bid bond would be a cost of $10,880 and the builders' risk insurance would be $2,040. The construction bid stands at $738,380.20; the bond, insurance and contingency are all separate expenses. We would like to move forward with approval from the Board to go before City Council on September 26, 2016, asking for a discussion with the Council of the concerns they have about the building construction at 2305 NW Loop 286. This discussion would have two suggested conditions presented to the Council: 1) the spec building cannot be leased without Council's approval and 2) the spec building cannot be sold without Council's approval. One concern the Council has is that a local employer would lease the building. Mr. Paris went on to say that the spec building is being built for the creation of primary jobs. PEDC Board Meeting Minutes September 20, 2016 Page 3 of 5 Another concern is that a person or a company would buy the building for less than what it was built for. Both conditions for discussion show that the PEDC wants to assure the City Council that their approval of a lease or a purchase of the building would be necessary before the PEDC could move forward. The purpose of this asset is to have a leverage point to help in the creation and retention of primary jobs. Along with the conditions for discussion with City Council; we also request a discussion concerning the approval of the construction bid of $738,380, the construction contingency of $25,000, the bid bond of $10,880 and builders' risk insurance of $2,040. The total request for expenses related to the spec building is $776,300. After receiving feedback from discussion with the City Council, we would write -up the agenda item for approval to take to City Council on October 10th. Mr. Banks asked about the Fees & Permits listed on the Cost Summary Worksheet and Mr. Paris stated that those fees were listed on the Itemized Costs Incurred Worksheet. Mr. Wilson indicated that in the fees were: Exum Plumbing to expose the water main and cap off because of the Fire Department; drafting services and platting fees; and other fees as listed. It was also pointed out on the Cost Summary Worksheet that items without an asterisk have already been paid. The numbers with an asterisk are the costs we are asking for. Mr. Paris went back to the Cost Summary Worksheet and asked that we look at the figures it would take to build a new spec building in the Business Park. The numbers are based on calculating out the prices per square foot from the bids we received for construction at 2305 NW Loop 286. We estimated $175,000 for other costs: sewer, water, power, gravel drive, concrete dock, and 3,750 sf metal building. This shows that our cost per square foot for a 38,360 sf building at 2305 NW Loop 286 is $28 a square foot, while the cost to build a 20,000 sf spec building at the Business Park is $50 a square foot. Mr. Hughes stated that he has received questions from some City Council members. Their concern is that the building will sit empty for years and someone from the Paris will buy the building "dirt cheap ". Also, businesses that want to come in to Paris would rather build a building that suits them, not one that is already completed. Mr. Paris expressed that 75% of the prospects are looking for an existing building. There are communities around us that have spec buildings being looked at because they have buildings ready to go. Bonham has a spec building that will be bringing in 100 jobs to their area. Mr. Wilson interjected that with a spec building it can be three to five years before a business comes in, but without a spec building that same industry will never come to Paris. Mr. Paris said that the September 26th meeting with the City Council will only be a discussion on the spec building. Mr. Brockman spoke about the spec building being zoned Heavy Industrial and that the height requirements of buildings has increased over the years. Mr. Banks talked about the 75% figure; he stated that it does not include other variables that we cannot meet; being closer to an interstate highway or having an international airport. Mr. Paris emphasized that the spec building would be a marketing asset we could use to talk about Paris. Mr. Manning stated that we need to go forward with the discussion before City Council. Mr. Wilson expressed how disappointing it is that citizens' have not come to the Board meetings to hear the discussion the Board has had concerning the spec building. Mr. Manning entertained a motion to move forward. Mr. Brockman moved that the PEDC accept the bid of $776,300 for the spec building and that we meet with the City Council at their next meeting to answer all the Council's questions and have any discussion that they wish to have. Also, possibly at the October meeting we would make a presentation to the Council for approval to proceed with the spec building. All is subject to City Council approval. Mr. Manning seconded the motion. Vote was 5 -ayes to 0 -nays. PEDC Board Meeting Minutes September 20, 2016 Page 4 of 5 Executive Director's Monthly Report. • The Lamar County Chamber of Commerce is having their meeting on October 25th. The Board is to vote on the Industry of the Year award, which will be emailed to them. There are three industries the Director wanted to highlight: 1. Bodyguard: is doing a great job producing their product; is hiring skilled employees; is marketing product very well. 2. PJC: is very important to the industry in our area; producing employees for our industries. 3. Kimberly - Clark: is adding technology to their manufacturing process; is investing into the Paris plant. • The Airport Group is meeting one more time with three aspects they will take to the Mayor: 1. The PEDC will be working with marketing the Airport and spending the $10,000 set aside for marketing primary jobs. 2. Cox Field does not have an on -line presence. 3. Suggest ways to increase the value of Cox Field. • Team Texas Road Show was in Atlanta, Georgia. Met with decision makers in industries: 1. Adedge Water Technologies is developing water usage for municipalities. 2. Excide Technologies produces lead acid batteries. 3. AFL Telecommunications is interested in large data centers. 4. Stueken, LLC uses a 3 -D printing process for manufacturing car parts. 5. Brawo, USA builds brass components for plumbing fixtures. • Great States Conference in Dallas. This was attended by site selectors: Site Selection Group; Jones, Lang, LaSalle; Cushman & Wakefield. Texas was well represented by a Texas booth, TEAM Texas, Texas ONE. The state of Louisiana was at the conference making a big statement. New Mexico, Arkansas, and Oklahoma were also represented. Dr. Lowell Catlett is a futurist that made remarks about the future of the South because of our location, climate, and technologies. The adaptation of technology is not adding jobs to industries like it did in the past. • Plans have changed for travel, since we are attending meetings with the City Council. The IEDC meeting and the IAMG meeting are both being cancelled due to the conflict in the schedule. The TEDC Conference in October and the National Business Aviation Conference in November will be scheduled. Convene into Executive Session: Convene into Executive Session pursuant to Section 551.087 of the Texas Government Code to discuss or deliberate: 1) 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 governmental body is conducting economic development negotiations, or 2) to deliberate the offer of a financial or other incentive to a local PEDC Board Meeting Minutes September 20, 2016 Page 5 of 5 business. (1) Daisy Dairy (2) The Results Company (3) Project White Rock. Mr. Manning convened the Board into Executive Session at 5:00 p.m. Reconvene into Open Session and Possibly take action on item(s) discussed in Executive Session. At 5:25 p.m. the Board reconvened into Open Session. Mr. Manning asked if any action would be taken on items discussed in Executive Session. The Board indicated that no action would be taken. Discuss Future Agenda Items. No items were discussed. Adjourn Mr. Banks made a motion to adjourn. Mr. Wilson seconded the motion. Vote was 5 -ayes to 0 -nays. The meeting was adjourned at 5:26 p.m. Respectfully submitted, Paula Brownfield Administrative Assistant Paris Economic Development Corporation