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04/18/2017 MINUTESPARIS ECONOMIC DEVELOPMENT CORPORATION MONTHLY MEETING Board Members Present: John Brockman, Vice -Chair Don Wilson, Secretary/Treasurer Ray Banks Ex- Officio Members Present: Legal Counsel: Stephanie Harris, City Attorney Call to Order. Paris City Council Chambers 107 East Kaufman St. Paris, Texas 75460 Tuesday, April 18, 2017 4:00 O'CLOCK P.M. MINUTES Staff Present: Michael Paris, Executive Director Chris Stout, Economic Development Associate Paula Brownfield, Administrative Assistant Guest(s) Present: Gene Anderson, City of Paris Colton Sanders, Paris Free Press Anna Rae Gwarjanski, The Paris News City Council Liaison: Billy Trenado Mr. Brockman called the meeting of the Paris Economic Development Corporation to order at 4:00 p.m. on April 18, 2017. Citizens' Input Mr. Brockman invited those present to speak during Citizens' Input. No one came forward and the Citizens' Input was closed. Discuss and possibly approve Minutes of the March 21, 2017, Monthly Meeting. Mr. Brockman asked if there were any additions or corrections to the March 21, 2017 minutes. Mr. Banks stated that Mr. John Godwin had attended the meeting, but was not on the list as an Ex- Officio Member Present. Mr. Banks made a motion to approve the minutes with the corrections. Mr. Wilson seconded the motion. Vote was 3 -ayes and 0 -nays. Discuss and possibly approve March 2017 Financials. Mr. Wilson started the discussion of the March financials by pointing out the $8,000.00 to Potters at the top of the Cash Out Report. This was the 2016 incentive payment for completing their compliance for that year. Mr. Wilson asked about B & C Printing under Marketing for $383.00; to which Mr. Paris answered that B & C Printing printed the Transportation & Map brochures that were taken to Lamar County Days. Mr. Banks inquired about the $4,029.91 paid to Capital One and if some of that was for Lamar County Days. PEDC Board Meeting Minutes April 18, 2017 Page 2 of 5 Ms. Brownfield answered that about $1,800.00 was for Lamar County Days. Mr. Wilson pointed out on the last page of our Monthly Expenses Worksheet that the PEDC's total cash and reserve balance was $3,459,719.06 at the end of March. Mr. Banks asked why there were no numbers on the first page of the Monthly Expenses Report under the line for Lamar County Days. Ms. Brownfield apologized for not breaking the numbers out between Marketing /General and Lamar County Days. Mr. Banks referred us back to the Cash Flow Analysis and questioned how much of our Cash Balance was in both the Lone Star and Texas CLASS investment pools. Also, how have these balances changed since September 30ffi of 2016? Mr. Anderson said that he sends Ms. Brownfield a Balance Sheet that includes the balances of the investment pools every month. Mr. Brockman asked that the Balance Sheet be included in the Board Packets every month. Mr. Brockman made a motion to accept the March financials for 2017. Mr. Banks seconded the motion. Vote was 3 -ayes and 0 -nays. Discuss with Mr. Gene Anderson the investments we have with the Lone Star Investment Pool and Texas CLASS Investment Pool. Mr. Paris spoke of the Investment Pools highlighted on page 8 of the Auditor's Report "Investments in the Lone Star investment pool and the Texas CLASS investment pool are not insured or guaranteed by the FDIC or any other government agency." Mr. Banks asked that Mr. Anderson clarify why the investment pools were not insured or guaranteed. Mr. Anderson stated that there are six investment pools and we invest in two of those pools. The pools are created by state statue under Government Code Section 2256.016 and were setup for cities, schools, counties and other state authorized type agencies. The primary advantage of these investment pools is that a public entity has its money in a safe place and has ready access to its money. The investment pool can only invest the entity's money in ways that follow the state statue. Mr. Banks asked if the investment pools were like a mutual fund. Mr. Anderson replied that they were similar, but they can only invest according to the state statue, they need to maintain a triple -A rating and no -fee to manage the money. Mr. Paris asked if the investment pools were a low risk bond type structure which you could liquidate money quickly. Mr. Anderson stated that it was very low risk. Mr. Wilson said that it was like a money market fund. Mr. Banks asked who pays the investors and who pays the pool's staff. The answer was with the spread or margin just like a bank. Mr. Banks stated he brought up the investments section because the auditor has had it in the audit for the last three years, maybe more. Mr. Anderson said that the auditors placed these as footnotes for information purposes only; not as findings in the audit. The Board thanked Mr. Anderson for answering their questions. Discuss and Possibly approve JC Darnell Computer Service and Jazzy Frog web maintenance contracts. Mr. Paris stated that we wanted to reestablish JC Darnell's contract and have Jazzy Frog's contract ready to reestablish when their contract comes due. For the computer network services we took verbal requests for bids on monitored backups and maintenance contracts on hardware and software. The second set of verbal requests for bids was for five hours of quarterly website updates and web hosting for our website. Mr. Paris recommended to the board that we stay with JC Darnell. He is a bit more expensive, but he understands our computer network and he is local for quick response. The yearly fee is $4,572.00. We could establish a year contract with the option of a one year extension. Jazzy Frog has a yearly fee of $500.00 that includes five hours each quarter of website updates. Jazzy Frog is local to the Paris area, too. Mr. Brockman asked if JC Darnell's amount of $4572.00 was similar to the amount of the contract for last year. Mr. Paris responded PEDC Board Meeting Minutes April 18, 2017 Page 3of5 that is was. Mr. Banks made a motion to accept the staff's recommendations on both contracts. Mr. Wilson seconded the motion. Vote was 3 -ayes and 0 -nays. Discuss and possibly approve budget amendments to the PEDC 2016 -2017 budget. Mr. Paris pointed out on the 2016 -2017 PEDC Budget Amendments spreadsheet you see cells displayed in blue, these are the monies that are transferring between accounts. The cells in green are the monies being added to the budget. Following the spreadsheet's blue cells, Salaries & Wages is adding $21,000.00 and Social Security/Medicare is adding $2,000.00; this is the exact amount Contract Labor in blue is transferring out (- $23,000.00). The first green cell you see is Insurance Benefits for $8,500.00. This is increased after the Board approved the insurance benefits. Going on to Direct Business Incentives/Park Street Project the amount of $60,000.00 will be added to the budget to pay Wheeler Construction. Staying in the Direct Business Incentives under Potters an additional $8000.00 is added to the budget to pay both years of incentives and under Powder Innovations $1,276.77 is added to pay 2016 property taxes on Incentive property given back to PEDC. The green cells are increasing the budget by $77,776.77. Mr. Banks made a motion to add $77,776.77 to the original 2016 -2017 PEDC budget. Mr. Wilson seconded the motion. Vote was 3 -ayes and 0 -nays. Discuss and possibly approve SuRRMA's request for support in the amount of $2000 within the PEDC 2016 -2017 Budget. Mr. Paris stated that at the February 2017 Board Meeting Mr. Harper spoke to the Board about the money the PEDC would be receiving back from the Highway 24 project; while he was speaking to the Board, he requested $2000.00 a year towards SuRRMA's reserves and their operational budget. Mr. Paris said that "SuRRMA's request for support" was on the agenda at the March 2017 Board Meeting. At that time a decision was made to table the Item when the question was put to Counsel "is the contribution that we make project specific ?" At that point, Mr. Banks requested that Ms. Harris look one more time for "project specific" or "promotional" so the Board would know exactly to do. Mr. Paris referred to a memorandum in our packet from Ms. Harris that confirmed: 1) the $2000.00 requested should be a one -time opportunity. 2) this is not a project specific investment, therefore cannot be taken from general funds. She did indicate the Board can decide if they would like to give $2000.00 from our Marketing budget. Mr. Paris said the Board needs to define Promotional, if the Board chooses to move this way. In defining Promotional, we would state something to the extent that "SuRRMA as an entity is a vital resource to create and retain primary jobs in and around Paris, Texas. That this promotes the community, this promotes the logistics, and the needs of this community for broader economic development growth ". This brought on a discussion of the definition of "promotional ". Ms. Harris thoughts were that if the Board can articulate how this expense would further the PEDC's promotion and development of new and existing businesses in the area; that the Board articulate that into a motion approving this expenditure and we can follow it up with a resolution that has factual findings of those promotional purposes. Mr. Paris told the Board that this will help articulate these findings. Ms. Harris said that her preferred method is for the Board to do the motion today and articulate your findings; then she will put the findings in a resolution and bring it back to the next Board meeting for the Members to read the resolution before they vote on it. Mr. Wilson stated that SuRRMA's mission is to provide better transportation and to bring industry into Lamar County. It is a known fact that some large industries do not look at growth opportunity in areas that would put their trucks on two -lane roads for any length of time. When a company's trucks are on two -lane instead of four -lane highways, their insurance costs go up. SuRRMA obtained the funding from the PEDC and other entities; and went through the process successfully getting 24 completed. We have Highway 271 and Highway 82 urgently needing help, and SuRRMA's mission is still the same; to go out there and get whatever they can for the betterment of our community to where we can sell our community to industries. So it is not a far stretch to say just like we pay people in Canada to try to generate leads, they are out here to get us in a position where we can get PEDC Board Meeting Minutes April 18, 2017 Page 4of5 those leads and follow -up and say "Yes" we have more than one or two routes that are four -lane. Now we got 271 or now we got 82 that is tied to 75. So, I don't think it's a stretch at all to say that this is a legitimate motion for $2000.00 for just one year. Ms. Harris stated that she may have been mistaken, but that's what she thought she heard him say. This is not something that is tied up in an incentive agreement, so it is part of your budget that needs to be approved every year by the PEDC Board and the City Council. If what you want to do instead of making a fifteen minute motion is you can move to approve that expenditure subject to the City Attorney bringing back a resolution that reflects the discussion here today. Mr. Brockman said that he agreed with Mr. Wilson; SuRRMA's recent success is evidence that they are definitely good for Lamar County and have accomplished what they set out to do. There is still work to be done and the PEDC supporting SuRRMA is a positive thing. Mr. Paris asked Mr. Banks if he was okay with putting together a resolution. Mr. Banks stated that he was not okay with spending the $2000.00 for SuRRMA. Mr. Brockman went on to say there was a motion and a second made; subject to the resolution coming back to our next meeting and we will vote on it at that time. Ms. Harris asked if the Board wanted to vote on the motion and the second that were already made. She said they should vote on that and at the next meeting they would vote on the resolution. Mr. Brockman asked the Board "All in favor of moving forward with the motion ". Mr. Wilson made a motion to approve that expenditure subject to the City Attorney bringing back a resolution that reflects the discussion here today. Mr. Brockman seconded the motion. Vote was 2 -ayes and 1 -nays. Mr. Banks was the nay vote. Discuss and possibly approve the Executive Director's Employment Agreement with the Paris EDC. Mr. Paris stated he and Chairman Manning discussed putting together a new Employment Agreement. The agreement reflects the changes in the Texas Municipal League, the changes in healthcare, and the changes to benefits. It also allows for compensation of the Executive Director that is unrelated to performance, if the Executive Director is released from his duties. Mr. Paris said that a draft copy of the employment agreement in the Board Packet reflects the earlier agreement that was written when he was hired just over a year ago. He pointed out the change in the Duties and in the Covenants sections. Mr. Banks pointed out the first line on page three has the word "severance" and he suggested that it be replaced with "wages in lieu of notice ". Mr. Banks mentions that Item d. has the word "termination" and it should be changed to "resignation ". Ms. Harris made a suggestion that on the last page of the agreement before the signatures it read "As approved on this Day of 2017 ". Mr. Wilson made a motion to approve the Executive Director's Employment Agreement subject to the amendments put forth in our discussion. Mr. Banks seconded the motion. Vote was 3 -ayes and 0 -nays. Executive Director's Monthly Report. We took Project Iron Anchor to the Governor's Office. Representing Paris were: Mr. Derrick Hughes, PEDC Board Member; Dr. Pam Anglin, President of Paris Junior College; Mr. Greg Wilson, President of Lamar Bank. In attendance at our presentation from the state level were: Interim President and CEO of the Texas Economic Development Corporation Foundation, three of the team in Economic Development at the Governor's Office, and a handful from the TX Workforce Commission. It was impressive to have three different areas of state level economic development professionals at our meeting. The first component of our presentation was Paris, Texas as a whole. We highlighted the Value Stream that we offer to keep businesses here and to recruit businesses here. Our Value Stream: Active Infrastructure, Skilled Workforce. Our third Value Stream is Logistics: transportation which included Highways 24, 271, and 82. We highlighted the NW Industrial Park as about 120 acres with space available and infrastructure ready. We went on to list some of our Assets, the Build to Suit facility, the space coming open PEDC Board Meeting Minutes April 18, 2017 Page 5 of 5 because of the DHL contract, and we tried to highlight all of our assets. One of the biggest advantages we have in Paris, Texas is the New Market Tax Credits and our location on the map of New Market Tax Credits. Another Value Stream we talked about was our Airport. Paris, Texas has a Quality of Life that we made into a Value Stream and that was because you not only have a unique small town feel, but also the hunting and the fishing in the area. • The second component that we presented to the Governor's Office was how we could participate in the electric vehicle industry. We have a skilled workforce and a college that teaches skills in our area that could refurbish electric engines or transmissions in the electric vehicles. The Governor's Office was very impressed with the thinking on this. Phil Rocha who is with the Economic Development & Tourism Division of the Governor's Office and handles a lot of the automobile recruiting asked Mr. Paris to travel to Detroit to an auto show with him. But it did not fit the PEDC schedule. • Project Wind Cave was an RFI that came from the Governor's Office. They visited Paris and put us on a list of finalists. The New Market Tax Credits are a big incentive to them. • Project Sun Bird is still active and the company is looking at a large project and a large amount of people. • Project Clean Rock is making a commitment to Paris and will be coming back to talk in the near future. • J Skinner addendum was approved by City Council at last meeting. Now J Skinner is moving forward with their investments. • The sign is up at the Build to Suit site. It looks very polished. Convene into Executive Session: The Board convened into Executive Session at 4:57 p.m. Reconvene into Open Session and Possibly take action on item(s) discussed in Executive Session. The Board reconvened back into Open Session at 5:09 p.m. No action was taken from the discussion that took place in Executive Session. Discuss Future Agenda Items. No future agenda items were discussed. Adiourn Mr. Wilson made a motion to adjourn. Mr. Brockman seconded the motion. Vote was 3 -ayes to 0 -nays. The meeting was adjourned at 5:10 p.m. Respectfully submitted, Paula Brownfield Administrative Assistant Paris Economic Development Corporation