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08/05/1993 MINUTES1 PARIS ECONOMIC DEVELOPMENT CORPORATION August 5, 1993 An informal meeting of the Paris Economic Development Corporation was held August 5, 1993, 9:00 P. M., at City Hall, City Council Chambers, Paris, Texas. Chairman Eric Clifford called the meeting to order with the following members present. Barney Bray, III, Phillip Cecil , and Curtis Fendley. Also present were members of the Chamber of Commerce, City Councilman Wayne Brown, City Councilman Jim Bell, City Manager, Michael E. Malone, City Attorney T. K. Haynes, and City Clerk, Mattie Cunningham. Chairman Clifford, opened the meeting by telling those present it was the consensus of the Directors, City Staff, and Council that further guidance and information was needed to get the corporation off the ground, and Mr. Shelton has agreed to come up and listen to our needs, make a presentation, and come back with a proposal. Chairman Clifford introduced Bill Shelton, CED, The Cornerstone Group, 777 Taylor Street, Fort Worth, Texas. Mr. Shelton said that now that Paris has the sales tax in place, he wanted to talk about what Cornerstone can do to assist the Corporation, and not talk a great deal about what Paris can be, because he did not know what Paris can do. Mr. Shelton said that one of the things you will see, as he makes his presentation, is whatever comes out of this has to be a Paris solution, you can look at Longview, Sulphur Springs, you can look at towns that has preceded you with the sales tax, and you can get some ideas, but you are unique. Because of your history in Economic Development, you are unique, and you should keep that uniqueness as you develope the plans and process on how you are going to do the economic development. At this time Mr. Shelton presented a slide presentation: Mr. Shelton pointed out that the latest figures in the United States and Canada there was approximately 9 thousand Community. Economic Development Organization that the City will be competing wi'th that have similar type organizations, the bad news is that are a lot of them out there, the good news is if you talk to the professionals, the people who do site locations, locating business, there are not that many good companies, that probably 10% of the community organizations are really technical. Mr. Shelton said the goal that you have to have in establishing this new relationship, you have with the Economic Development Corporation is to say - we want to be an effective program, we want to be one of those 10% that has an effective Economic Development Program. You have competition in particular in sales taxes, sales taxis not unique in Texas. When we first passed the sales tax back in 1989, the State Legislature did it and Senator Bill Ratliff was the sponsor of the legislation. He was very proud of Texas, he thought that for one time we were taking the initiative to do something that has not been done in the United States. We did not have to be on the cutting edge of the Economic Development. We stole most of the idea from the State of Mississippi, North Carolina, South Carolina, and Virginia. In 1989 when the legislature passed it, he was very happy to see us do it, and in checking around, he found that Utah had done this a number of years ago. What happened in Utah, they had a permissive one quarter sales tax, and what happened to Utah can be a lesson to us in this state. You had the cities that voted the one quarter sales, tax, you have the cities that did not vote it, or it failed. What happened, the cities that did not vote it lobbied the legislature to the fact that it is unfair competition for those people to have that money, and for us not to have the money, and you know what the legislature did in their wisdom? They wiped out the ability to have the one quarter sales tax. The reason to bring this to your attention is that now there are some efforts now in this state for cities to say that it is unfair competition. What we have now is. We have 84 cities what we call 4A cities, 4B cities hold their election under the Old Arlington Stadium Amendment. As you will recall, the stadium was built with sales tax that was not legal at that time, and the voters of Arlington who voted the 2 sales tax in did not have the authority to do so. When the legislature went into session, they amended the original article and made 4B which is Arlington Stadium, and eleven cities have passed the sales tax under 4B, and what it amounts to is we have 84 cities and the 11 cities that have the authority to do the sales tax and those cities last year would have raised over one hundred million dollars for Economic Development. The largest city to pass the sales tax is Lubbock, raising eight million annually. Amarillo is second, raising over six and one half million dollars. We have six cities in the State of Texas that raise more money that the State of Texas's budget. Mr. Shelton pointed out that the advantage of sales tax is an effective program. It allows you to borrow for the Texas Department of Commerce up to four million, and only the cities that have the sales tax can do this. So, if you have the ability, and if your project is now in place to guarantee from your future sales tax revenue to borrow 4 million dollars, the expenditures are handled locally, few legal restrictions in use of the funds, eliminates the red tape, funds are accessible to existing businesses for retention, and expansion. As for trying to move companies in from the outside, you can terminate it at the will of the community. The disadvantage is the misuse of the sales tax, more money than effective programs, abuse of the money, once you pass this private sector funding and involvement may be reduced. It does not have to be reduced. You have to be careful. It is important to keep the private and public sector working together. Advantages or disadvantages, once you pass this election, the traditional roll of the Chamber, the traditional roll of the Industrial foundation are changed. You have to realize that going into this, you need to work it out so that you all are in the same boat together. Economic Development is getting the right people in the boat. Simple to say, hard to do to get them going in the right direction. Mr. Shelton pointed out that your traditional programof attraction is manufacturing, but the creative programs pays attention to retention and expansion of local firms. In fact, an outside firm will look at how well you are working with local firms. We use to rely on Federal and State assistance, low cost labor, serving regular national market, and low cost land. Today, we rely on local leadership to provide skilled and flexible labor serving international and local market, accessible technology, and capital. Today the companies are demanding more and wanting more in skilled labor forces. Mr. Shelton gave the group a handout and went over the strategic planning process. Mr. Shelton said they would come in with Dr. Perryman and hold focus group sessions consisting of 12 or 15 groups in the City of Paris. They would have major manufacturers, smaller manufacturers, financial institutions, elected officers, school officials, people from the medical fields, churches etc. working with them to come up with a cross section of this community in order to come into a very detailed focus group session. They would talk about where you want Paris to be, what you see as your strengths, what you see as your weakness. They would also survey all the manufacturers here in Paris. They would conduct specific interviews with individuals, then they would go to all the utilities companies, railroads, and State Agencies that have economic development programs to get additional information about Paris. Then they would do an evaluation of current programs. This is basically very detailed. This data will be given to you in the form of a book, and will also be given to you on a computer disk. It will be very detailed and demographic of what makes up Paris, Texas. This will be a great tool and source of information. It is only as good as it is used. They would work with your Economic Development Organization on how to use that to make it an effective tool. They they will talk about your weaknesses. After this, they will come up with a potential target list, this will be a gross list. What they will do is look at the State of Texas. They have target groups. Lone Star Gas and T. U. Electric have target groups also. Then they will look at you assets 3 and your strengths, and come up with this gross list, which will form a comprehensive assessment. by the time they get through this process, they will have a very good image of what Paris is, what our aspiration is, what our philosophy is of development. Then we go into the Strategic Planning Process, and that is where you want to go. We take the comprehensive assessment and we do this, and this is where it becomes tough. We will work with you to develope an economic development vision of what you want Paris to be. It becomes a share when other buys into it, so that you all are tracking in the same direction. You are all focusing your efforts going in one way. We do that through the local analysis that we have here that we developed as a comprehensive assessment. We look at regional and national trends, business patterns, government action, competition, what your allies are doing, and then we start defining goals and objectives. This is the process that we do in workshop sessions with your 5 person Board of Directors, but others should be involved in defining what are major goals. We are not looking at 15 - 20 major goals, we are talking about 1, 2, or 3 major goals to achieve your economic future. You will work that into your market place. You start going to trade shows, taking trade publications,and get them thinking about Paris Texas. While we are doing that, we start talking about alternate strategy. Then we select specific strategies, and this has to be an on going process. Mr. Shelton said that shared visions and implementation is how to market Paris. Texas. Phillip Cecil asked Mr. Shelton that if part of his work in setting up the organization, would be perimeters, to develope perimeters for the corporation to be guided by, in investments. That it will make what is appropriate for those perimeters, in other words, how much money would be appropriate to be extended per job acquired, whether it would be in the form of a loan or whether in the form of some other type of assistance, would that be addressed. Mr. Shelton said they would do this. They would help you develop a financial incentive policy. Phillip Cecil said to follow that step further, he assumed there are various actions that are very inappropriate for the corporation to do and get involved in based on your experience. Mr. Shelton said, yes, one of the things is when the City Council appointed you to the five person board. Did they give you a charge, did they give you a charge with a specific responsibility except economic development. I would say in this process if you step back now that we are involved, if we are involved, we would work with the City Council in developing a charge to this 5 person corporation that becomes the key for what you do. Mr. Shelton gave an example of going outside the city limits to finance a business. Roy Sparks asked that in their study would they recommend or show how the organization should be run, as to what part the Chamber's Economic Development Team would play in the roll and the 5 member board, and how they would work together. Mr. Shelton said this is what we would work in right there. That part of this is very critical. Jim Bell asked Mr. Shelton the differentiation between the old policies and the new ones, the difference in manufacturing to shift was to a well creating industries, could you give him an example of well created industry because in his mind, it seems to be that the thing that has worked best for Paris is still manufacturing because they will create better wealth than anything else. Mr. Shelton gave an example of tourism. Jim Farris asked for the time period to develop this plan. Mr. Shelton said approximately six months. Phillip Cecil wanted to know if the City hires their firm or another, can it be paid out of of the Economic Development funds. Mr. Shelton said yes, it would be administrative cost. Don McLaughlin wanted to know as their firm is working with a number of other cities and a prospect comes to them, do the make a recommendation. Mr Shelton said no, we stay away from working with companies. Pat Bassano wanted to know about cost factors and did they have any numbers for them. Mr. Shelton said no, if you have something you want us to do, we will, first, go back to Dr. Perryman and get his costs. Then we will give you the cost of the total project. Eric Clifford told Mr. Shelton that he would be hearing from us in a few days, and this should be presented to the City Council. Mr. Shelton pointed out that the bylaws are important and should establish the relation of the Board and City Council starting with the charge of the Board, and they would like to be a part of establishing the bylaws. Jim Farris wanted to know if there was a meeting of the D.I.C. coming up to discuss appropriate types of projects and inappropriate projects. Mr. Shelton said yes, September 8th he would be giving a program in Lubbock. Eric Clifford said this concludes the presentation, and the meeting adjourned.