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09/27/1994 MINUTES 8 MINUTES OF THE PARIS ECONOMIC DEVELOPMENT CORPORATION September 27, 1994 The Paris Economic Development Corporation met in a regular meeting on Thursday, September 27, 1994, at 4:00 P.M., in the City Hall, City Council Chambers, Paris, Texas. Chairman Philip Cecil called the meeting to order with the following board members present: Dick Amis, Curtis Fendley, Leon Williams and Barney Bray. Also present were ex-officio board members, Ike Jewett (representing Gary Cunningham), Bobby Walters, Gary Vest, Economic Development Director, Michael E. Malone, City Manager, and T. K. Haynes, City Attorney, as counselor. Mr. Cecil stated that the first item on the agenda was approval of the minutes from the previous meeting of the Paris Economic Development Corporation. He asked if there were any corrections or additions to the minutes of the previous meetings and there were none. Board member Dick Amis made a motion, seconded by Board member Curtis Fendley, to approve the minutes as presented, and the motion was approved unanimously. Chairman Cecil asked Mr. Anderson, Finance Director, to go over the financial report. Mr. Anderson stated that the Board had been given a copy of the standard report consisting of the balance sheet showing the cash balance as of today, revenue summary, and the expenditures. Mr. Anderson stated he would be glad to answer any questions regarding the report. Chairman Cecil asked if the $51,560.00 expenditure was the Soup Street Project, and Mr. Anderson said that was correct. The board members discussed the total number of months receipts with Mr. Anderson, and he advised that the tax rate was effective October 1, 1993, but the City did not receive any money until December. Chairman Cecil called for consideration of and action on changing the regular Wednesday Paris Economic Development Corporation meeting for the month of October due to a scheduling conflict. City Attorney Haynes advised this was placed on the agenda due to conflict with the Texas Municipal League Conference in October which will be attended by City officials. After further discussion, it was the consensus of the Board to set the meeting for October 19, 1994, at 4:00 P.M. 59 Chairman Cecil said he did not have a Chairman's report to give at this time. Chairman Cecil said the next item on the agenda was consideration of and action on the request for assistance from the Northeast Texas Economic Development District for We Craft, Inc., for a loan in the amount of $31,833.00 for the purchase of machinery, equipment and working capital. Board members Barney Bray and Curtis Fendley requested they be excused due to conflict of interest. Chairman Cecil asked Mr. Fendley and Mr. Bray to leave the meeting. Chairman Cecil advised the Board that Mr. Bray and Mr. Fendley were in partnership with Mr. Harper, who is a principal of We Craft, Inc., and feel that it would affect their Judgment in this matter. After their departure, a motion was made by Mr. Amis, seconded by Mr. Williams to excuse Mr. Bray and Mr. Fendley from consideration of the matter of We Craft, Inc, due to a conflict of interest. The motion carried unanimously, 3 ayes and 0 nays. Chairman Cecil advised each of the board members they had received information concerning We Craft, Inc., and he asked Mr. Vest to review the proposal with the Board. Mr. Vest stated the request came from the Northeast Texas Economic Development District which is a federally funded organization that administers E.D.A. grants, loans, etc. He said We Craft, Inc., is asking for participation in their revolving loan fund program. Mr. Vest said the way the revolving loan fund program works is they ask the local community to provide 25% of the dollars for the revolving loan fund and the other 75% comes from the Economic Development Administration. He said as the note is repaid the Northeast Texas Economic Development District establishes a pool of money in a local institution and that money can be reloaned as it comes back in for other types of businesses qualifying for the revolving loan fund. He said the revolving loan fund has a maximum loan limit of $150,000.00 and We Craft, Inc., is asking for $127,333.00, and the 25% participation would be the $31,833.00 discussed in the document. He said the Northeast Texas Economic Development District administers all the paperwork, handles all loan collections, and servicing of the note. He said this note does require bank participation and the Northeast Texas Economic Development District takes the second position on all collateral, and the bank has the first lien position. Mr. Vest said the program is an excellent program, and he would like to see it established in Paris because it would benefit a number of businesses as the revolving loan fund increased. Chairman Cecil opened the matter for discussion by the board. Mr. Cecil wanted to know when that loan amount is repaid whether the Paris Economic Development Corporation would be able to take the money repaid from the loan and loan it to another party. Mr. Vest said the loan pool will be administered by the Northeast Texas Economic Development District, but the monies paid in from loans made in Paris can only be reloaned in the Paris area. Mr. Vest stated that the pool will continue to grow and the 25% is a contribution which never comes returns to the Paris Economic Development Corporation. He said this amount goes into a pool which will be reloaned. He said depending on how many loans the Corporation is willing to make, the pool in some communities has large amounts of money to loan businesses. Chairman Cecil wanted to know how to access the paid back funds. Mr. Vest 60 said the Paris Economic Development Corporation would not, but businesses in the area would be able to access it. Mr. Cecil questioned whether the Paris Economic Development Corporation portion could only be used for projects located in Paris/Lamar County. Mr. Vest said that was correct. Chairman Cecil wanted to know if the Paris Economic Development Corporation had input into the terms of the North East Texas Economic Development District's loan document. Mr. Vest said yes, the North East Texas Economic Development District would use their loan documents, but the Paris Economic Development Corporation would provide the cash much like the E.D.A. provided cash to the North East Texas Economic Development District to make these loans. Mr. Vest said the Paris Economic Development Corporation is providing a grant to the Northeast Texas Economic Development District so they can make these loans. Mr. Cecil asked if they would honor reasonable requests the Paris Economic Development Corporation had related to the loan documents. Mr. Vest, said yes, the Board could put whatever terms desired. Mr. Vest said when the loan is made Northeast Texas Economic Development District will administer the loan. Mr. Vest said basically you are loaning money out of this pool to substandard loans that are not the risk nature that would be accepted by a bank. Chairman Cecil said based on the number of jobs that Mr. Meadows from the Northeast Texas Economic Development District says he will create in Paris that, is within the parameters established for grants. Chairman Cecil stated the Board's parameters were $2,000.00 per job on a grant basis. Chairman Cecil called for questions regarding this project. Board member Williams wanted to know if there was a time limit given for those jobs to be filled. Chairman Cecil stated he felt the Board would want to make some kind of requirements on the jobs in the parameters. He suggested that this is a project that the Paris Economic Development Corporation could do with provisions that Board approval would be subject to obtaining bank financing, the four principals of We Craft, Inc., personally guarantee this loan and that payroll records be provided on an annual basis for tracking the 29 jobs to be created by February, 1996, and be maintained throughout the seven year term of the loan. Board member Williams said he had originally had some problems with this item, but after this discussion and understanding on the long term basis felt it would be beneficial to the community. Board member Dick Amis made a motion, seconded by Board member Leon Williams, that the Board participate in this project as outlined with amendments to the effect that this be subject to the obtained bank financing as outlined, to the loan documents containing the employee plan continuing from the end of the plan through the remainder of the term of the loan with Board monitoring, and the four individuals involved personally guaranteeing the debt. The motion carried unanimously 3 ayes and 0 nays. Mr. Vest advised the board that the minutes of this meeting would be provided to the Northeast Texas Economic Development District so the stipulations will be included in the contract. Board members Barney Bray and Curtis Fendley returned to the meeting. 61 Chairman Cecil asked Mr. Vest to make his report. Mr. Vest said he had a couple of magazines that are typically known as economic development type magazines he would like to pass around to the board members for information purposes. Mr. Vest said he had received a request from the Department of Commerce to participate in their trade shows. He said he thinks the board should work very closely with our allies, particularly the utilities. He said in working with the Department of Commerce they require a maximum $2,000.00 investment every time a trade show is attended and the utility allies will allow us to go for free. He said he wanted to make theboard aware of the request from the Department of Commerce. Chairman Cecil said he felt the Board agreed with Mr. Vest's judgment in working with the utility allies. Mr. Vest advised the Texas International Reception is a program that is put together by the Texas Department of Commerce and the Texas Industrial Development Council and will be coming up next week in Houston. He will be attending this as a representative of Paris. He said he had talked with Mr. Ernie Harris, one of Paris' allies at T.U. Electric and they have seventy trade representatives planning to attend the reception. He said the cost was $150.00 to participate, and hopefully Paris will get some exposure to international contacts. He said that T.U. Electric had requested that Paris participate in this particular program. Mr. Vest asked for questions concerning his industrial activities report. Chairman Cecil asked Mr. Vest to explain the Annual Plan of Work he had. Chairman Cecil stated that all the board members had received a copy of the Annual Program of Work. He said Mr. Vest had done some good work on this Annual Program of Work and the board needed to consider amending or adopting. Chairman Cecil asked Mr. Vest to go through the report section at a time. Mr. Vest said he based the goals and actions in this report on the visioning exercise that was conducted by the Pace Group and also the Mission Statement has already been identified by the Corporation. He said he had identified four major goals primarily from the Pace Group visioning exercise. He said he would like to go into those individually with some objectives and action statements. He said goal number one is to develop a public relations program to solicit local support of projects and programs of the P.E.D.C. He said the Chamber conducted a County-wide visioning exercise last year and the Public Affairs Committee has established this visioning exercise in an expanded form as one of their projects for this year with a November, December time-frame. He said he felt it was very important for the labor organizations to understand the goals and objectives of this organization. He also said there is a very great need to involve the leadership of our minority community. Chairman Cecil stated he felt it was very important that we sell ourselves to this community because we are spending their money. Mr. Vest stated goal number two deals with development of a marketing campaign that specifically addresses the locational advantages and positive aspects of Paris as a site for manufacturing, distribution, and service type facilities. He said the objective is to gain regional, state and national recognition of the positive aspects of doing business in Paris. He said he has placed under this goal coordination with the Chamber of Commerce Marketing Committee to publish brochures promoting Paris. He said the action step here would be for P.E.D.C. to see that those things are accomplished and to pay 62 for them. Chairman Cecil stated there is a ten percent of the tax collection limitation set as to what the board can spend for marketing. Chairman Cecil stated the board has budgeted $60,000.00 for marketing expenditures. Mr. Vest stated in this same area the board needs to develop advertising materials to be used in magazines, newspapers, billboards and direct mail. Mr. Vest stated the next action would be to participate in promotional activities such as those supported by the Texas Marketing Team, the Texas Industrial Council, and the Northeast Texas Economic Development as well as working closely with industrial allies such as T.U. Electric, Lone Star Gas and the Texas Department of Commerce. Mr. Vest said another action item was the development of Industrial Ally Appreciation Day. Chairman Cecil asked for questions. Mr. Vest stated goal number three was to establish a comprehensive industrial recruitment program including retention and expansion of existing industrial sector jobs. He said the objective under this was attraction of new industrial jobs while retaining and expanding the currently existing industrial base. He said they need to acquire necessary directories for prospecting activities. Chairman Cecil advised Mr. Vest to come to the board with a specific request for what is needed with the cost and the Board will act on this request. City Attorney Haynes said in the original plan they had some exercises to do to get help in the targeting area, and this was one of the things the board decided to postpone until they were working and organized. Mr. Haynes wanted to know if this was something the Board would want to have consultant help with in the future, or was this something the Board would be capable of performing? Mr. Vest stated he felt the Board would be able to accomplish this. Mr. Vest stated another action item would be to recognize local industries for expansion, growth and outstanding contribution to the Paris economy. He said in this area he was talking about an annual award possibly presented at the Annual Chamber Banquet. Chairman Cecil asked for questions or comments. Mr. Vest stated goal number four was to support the existing infrastructure and expansion of infrastructure in the community and to support community development by enhancing local infrastructure to support industry and to provide educational opportunities and training to enhance the local workforce. He said the objective under that goal would be to provide necessary support systems to entice industry and to provide a trained and ready workforce. He said at some point in time the Board might want to hold property, keep it cleared and marked with billboards. Chairman Cecil questioned Mr. Vest as to whether they are trying to develop an index of industrial sites. Mr. Vest said they are currently working on this information in order to obtain a consistent form for showing industrial sites. Mr. Vest said the next action was to construct a speculative building to attract prospective industry. He said you could build a very generic building that is versatile and could be expanded very easily. After discussion by the Board it was decided this section should be changed to consider construction of a speculative building to attract prospective industry. Mr. Vest said another action item was to promote the Smart Jobs Program and make sure local industries are aware of this program. Mr. Vest advised that he felt this Annual Program of Work was not complete, but perhaps it could be a starting point. He said he would welcome any input or direction in this matter. Chairman Cecil asked for comments. After discussion Chairman Cecil asked that the section be reworded to consider the construction of the speculative building. 3 Board member Curtis Fendley made a motion, seconded by Board member Leon Williams to adopt the Annual Plan of Work with the amendment to Goal IV Action to consider cpnstruction of a speculative building to attract prospective industry which carried unanimously. Chairman Cecil stated that the Board needed to consider a method of approving expenses. He said that Mr. Haynes had suggested that the Board needed to address this matter. Chairman Cecil said currently the method being used is any checks are signed by both the Chairman and the Treasurer. He said rather than the board having to deal with this on a precaution basis, he suggested that the Board extend to the Chairman and the Treasurer the authority to approve those expenses, and they will be reported on the regular financial report given each month. City Attorney Haynes stated this method does comply with the By-Laws. It was the consensus of the board to use this method. City Attorney Haynes advised that they are working with Mr. Donald Wilson to try to procure some railroad right-of-way to access the area from 1st Street S.W. to 4th Street S.W., and the Council has authorized this action. Chairman Cecil asked if there was any other business and there being none he declared the board meeting adjourned. CHAIRMAN PHILIP CECIL ATTEST: ASSISTANT CITY CLERK, BARBARA DENNY