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07/21/2017 MINUTESPARIS ECONOMIC DEVELOPMENT CORPORATION MONTHLY MEETING Board Members Present: Richard Manning, Chairman Marion Hamill, Vice - Chairman Tim Hernandez, Secretary /Treasurer Ray Banks Derrick Hughes Ex- Officio Members Present: Steven Clifford, Mayor Legal Counsel: Stephanie Harris, City Attorney Call to Order. Paris City Council Chambers 107 East Kauftnan St. Paris, Texas 75460 Friday, July 21, 2017 10:00 O'CLOCK A.M. MINUTES Staff Present: Michael Paris, Executive Director Paula Brownfield, Administrative Assistant Guest(s) Present: Sally Boswell, The Paris News Deanna Manning Delbert Horton, SuRRMA Don McCaskill Kelli Mallicote, Bodyguard Bumpers Grant Mallicote, Bodyguard Bumpers Kenneth Marshall Marilyn Marshall Jerry Akers City Council Liaison: Paula Portugal Mr. Manning called the meeting of the Paris Economic Development Corporation to order at 10:00 a.m. on July 21, 2017. Citizens' Input Mr. Manning invited those present to speak during Citizens' Input. No one came forward and the Citizens' Input was closed. Welcome of New Board Members. Mr. Manning welcomed two new board members to the PEDC Board of Directors: Timothy Hernandez and Marion Hamill. PEDC Board Meeting Minutes July 21, 2017 Page 2 of 6 Election of Officers. Continuing the business of a new board, Mr. Manning stated that the board would be electing new officers. The first to be nominated would be the Chairman. Mr. Banks nominated Mr. Manning for Chairman. Mr. Hughes seconded the motion. Vote was 5 -ayes to 0 -nays. Nomination for Vice - Chairman came from Mr. Banks who nominated Mr. Hamill. Mr. Manning seconded the motion. Vote was 5 -ayes to 0 -nays. Mr. Banks nominated Mr. Hernandez for Secretary/Treasurer. Mr. Hughes seconded the motion. Vote was 5 -ayes to 0 -nays. Discuss and possibly approve Minutes of the June 13, 2017, Monthly Meeting. Mr. Manning asked if there was anything to discuss in the June 13, 2017 minutes. Mr. Banks made a motion that the minutes be approved as presented. Mr. Manning seconded the motion. Vote was 5 -ayes to 0 -nays. Discuss and possibly approve May 2017 Financials and June 2017 Financials. Mr. Paris stated that the May financials did not make it for the June meeting, so we have both the May and the June financials this month. The cash out total in May was $36,688.46. Mr. Hernandez asked if the Capital One expenses were a credit card, to which Mr. Paris said they were. He said before the invoice is paid all the receipts are looked at make sure they are in the right accounts. The credit card is mainly used for marketing and travel. Mr. Banks made a motion to accept the May financial report as presented. Mr. Hughes seconded the motion. Vote was 5 -ayes to 0 -nays. Mr. Paris went on to the June financials. The total for expenses in June was $49,879.33. Under the Job Training expense the PEDC committed to a matching funds grant of $25,000.00 for Paris Junior College to buy a CNC machine. The other $210.00 to PJC was for the WorkKeys testing. Within the Marketing and Promotion budget there is a line item called ROI. This is a company we committed to work with last fall on marketing Paris and our industries. The $6,625.00 is the last payment to them. Mr. Banks made a motion to accept the June financial report as presented. Mr. Hughes seconded the motion. Vote was 5 -ayes to 0- nays. Presentation by Delbert Horton, Chairman of SuRRMA. A return of SuRRMA highway investment funds totaling $533,777.98. The PEDC will receive an additional $148,522.00 when CDs mature. Mr. Horton updated the Board on Highway 24 progress, telling the Board that the highway plans to be open sometime in October 2017. There are four bridges being rebuilt and when they are done the highway will be much closer to completion. Mr. Banks asked about the flooding on the highway and if it is being caused by work on the bridges. Mr. Horton said that drainage work needs to be done in one area to slow the water down. Mr. Horton held up the check that SuRRMA was giving to the PEDC for $533,777.98. Mr. Paris asked if this is what the PEDC was receiving back from the $1.4 million that it originally put toward the project. Mr. Horton said it was. The City of Paris, Lamar County and the City of Cooper all received payments on part of the principal of each of their loans taken out for the Highway 24 Project. A unique partnership was formed among the entities involved in this project. Mr. Paris said having this part of Highway 24 complete in October will allow four -lane access between Paris and Interstate 30. He asked Mr. Horton about other four -lane access into the City of Paris. Mr. PEDC Board Meeting Minutes July 21, 2017 Page 3 of 6 Horton stated that discussions are ongoing with Paris TxDot, Red River County and Fannin County on the improvement of Highway 82. They would like to see Highway 82 as a four -lane through the Metroplex. Highway 19 in Hopkins County is another project SuRRMA is looking at supporting. Mr. Paris stressed how important it is to have the four -lane access to major interstates. Kimberly Clark is running 170 trucks a day, Campbell's Soup is running 80 trucks a day, and Turner Industries is running 30 trucks a day. All are grateful for the highway expansion. TxDot will also be doing a Loop 286 study to measure the traffic and look at solutions for traffic flow. Mr. Horton said the future for SuRRMA will be to start with a study of the highways in the area and prioritizing the needs of the area. Mr. Banks asked about the rail service between Paris and Bonham. Mr. Horton said they are looking at the rail service. There is a rail line that goes between Greenville and Texarkana, but the problem is keeping it running. Since rail is an efficient way to move goods, they will search for how to get TxDot more involved in rail. Mr. Horton asked if there were any more questions. With no more questions, the Board thanked Mr. Horton and SuRRMA for the check. Discuss and possibly approve BodyGuard Bumpers' request for an additional $25,000 exceeding initial compliance of fifteen (15) employees to twenty (20) FTE employees -- Five (5) FTE Employees multiplied by $5,000 per iob. Mr. Paris let everyone know that BodyGuard is finishing out its current incentive agreement. For a full year the company has exceeded the initial compliance by 5 full -time employees. Mr. Paris recommended that the Board approve the request from BodyGuard to be paid the new job incentive of $5,000 per employee for the 5 new jobs created. This would be a total of $25,000. In addition to this a new agreement would be setup through June 2018; the agreement would be a new job incentive of $5,000 per employee for 5 new jobs created. The total of this incentive would be $25,000. Training funds are still available in the current incentive agreement and we would like BodyGuard to be reimbursed for some of the training costs. Grant and Kelli Mallicote, owners of BodyGuard, have worked with the PEDC for about six years. Ms. Mallicote said they have become a key player in the Specialty Equipment Market Association (SEMA) is the largest specialty automotive trade show in the world. At the 50th SEMA Show the goal of the Mallicotes' was to have 50 trucks to show, they surpassed themselves with 56 trucks. Ms. Mallicote stated that another goal was marketing the product more and that is happening because of attending more trade shows, being on 10 magazine front covers and in 15 magazine features, working with high - profile clients and TV shows on Discovery Channel. Ms. Mallicote stated that BodyGuard is number one in its industry. They are expanding across the U.S. and now the international market is opening up for them. Mr. Paris asked if Ms. Mallicote would explain the process they use to manufacture the BodyGuard product. Ms. Mallicote explained that they start with raw steel and end with a fmal product which is all done in house. The material goes through a press break where it is broke; it goes on to be cut into pieces and shapes, it is sent on to the welding bay for fitting and hand welding, from there it is on to pipe bending for the grill guard, the product is taken to the sand blast facility, it is then sent to powder coating, the final area is packaging and out the door. Ms. Mallicote said it is hard to keep welders because of the competitiveness in the area. Also, she talked about the attention to detail that is needed when welding one of the BodyGuard Bumpers. Another struggle is that both owners are being stretched too far and not having the time it takes to grow the business. The third item is the equipment being used; having new equipment would help the employees do their jobs better and would speed up the manufacturing process. Mr. Mallicote gave the PEDC Board Meeting Minutes July 21, 2017 Page 4 of 6 Board statistics on the company's growth. Year to year sales have grown 15% to 30 %. 2017 to date has seen a 53% growth over the same period as last year. Year -to -Date sales for 2017 are at 79% of total sales from all of 2016. W. Hughes asked about the welders pay and if it was comparable the welders at the trailer manufacturers. Mr. Mallicote stated that they pay a fair price. Ms. Mallicote said some manufacturers are paying a sign -on bonus or 90 -day probation programs with incentives at the end. Mr. Banks asked about the reasons for the turnover. Mr. Mallicote thoughts were that some who came in were just there to weld and did not want to do any fabricating. Mr. Manning interjected that the welders needed some skill in fabrication for the job. Mr. Hamill wanted to know about the insurance benefits offered. Ms. Mallicote replied that they do not offer major medical, but they do a company -paid Aflac policy. Right now not enough employees would take major medical for them to qualify for the 70% rule. Mr. Banks wanted to know about how the products were shipped. Ms. Mallicote answered that they ship with LTL Carriers, FedEx, and carriers out of Sherman. Two carriers want hubs in Paris because of the manufacturing here. Mr. Banks asked about the training that was written in the contract. The next question: would it be possible to have PJC come to your facility to do training? Mr. Hamill asked if Mr. Mallicote does the training and if are qualities that he sees in a person that would make a good fabricator. Mr. Mallicote said that the grinding and bending to make the parts fit together and look pretty. Mr. Paris recommends Board discuss and possibly approve paying $25,000 based on the documented five (5) jobs BodyGuard has created since the original fifteen (15) jobs. Since the current agreement expires soon, a new incentive agreement will be written through June 2018 for $25,000 based on creating five (5) jobs. Ms. Harris looked at the current incentive and concluded that it could be amended for the five (5) employees that have been employed over a year. Mr. Banks made a motion to amend the contract to provide an additional $25,000 for job creation for BodyGuard under the current agreement established September 12, 2012. Mr. Hughes seconded the motion. Vote was 5 -ayes to 0 -nays. Discuss the Paris City Council's action and the future of Paris Economic Development Corporation. Mr. Paris wanted to make sure the Board had a complete understanding of the City Council's decision at their meeting on June 26, 2017. The June 26, 2017 Minutes of the City Council, page 6, item #16, reads "Discuss and act on conducting a special election regarding termination of the quarter cent economic development tax and adoption of a quarter cent municipal sales and use tax for street maintenance, provide direction to city staff, and authorize the city attorney to retain outside counsel related to same." This item was put on the City Council agenda by Council Member Lancaster because it had been approved by the voters in 1993 and she thought that the citizens should vote on whether they wanted to continue the tax. Mr. Paris said that the discussion started on what this change would mean to economic development and the discussion went on to question if they should they be looking into Type 4B. The Mayor spoke about how some cities have economic development under the city. No details were given about the future of economic development in Paris, Texas. Mr. Paris went on by saying "As a Board, what that means to us is that there's a possibility that during the November election that the citizens of Paris decide that they want to redirect those funds away from the EDC toward City streets and infrastructure. You as Board Members, you volunteered to be on this Board, PEDC Board Meeting Minutes July 21, 2017 Page 5 of 6 obviously you have a vision for economic development and this community. The reason you are a part of this process." In February of 1993 an organization called "Jobs for Paris" went before the Paris City Council. Mr. Eric Clifford and Dr. James Burnette told the Council that Paris was at a "competitive disadvantage in the area of Industrial Development" and they then asked the Council to let voters decide on the proposition of a quarter cent sales tax for Industrial Development. Mr. Paris said that even today Paris needs the 4A funds to stay competitive. In Texas there are 708 Economic Development Corporations: 216 are Type A, 492 are Type B, and more are Type AB. Mr. Paris made a point to the Board that in 1993 they were fulfilling the request and the charge of the City Council. Now, since he has become Executive Director, we have been working to reestablish a relationship with the City Council. A question for City Council is "What is the request and what is the charge... from City Council for our group ?" We as a community need to "define what success is in Economic Development in Paris, Texas ". Mr. Hughes said the question that gets asked at the seminars is "what is your purpose ?" The speaker at the seminar stressed that when you have Paris for your city name you need to get out and sell that name. Mr. Paris said this needs to be answered "What does this community want? How does it see success ?" Executive Director's Monthly Report. • TEAM Texas went to Washington, DC to be part of the Select USA. The Summit is for foreign direct investments by the U.S. Commerce Department. TEAM Texas had a booth which all of the TEAM Texas participants worked. A high profile person from India came into the booth while I was working it and introduced me to the India delegation. This gentleman works for a major manufacturer of air frame and air engine parts in India. I took him to dinner and conveyed to him what Paris could offer him. Because I met this gentleman, I was considered part of the India delegation as they were meeting Secretary of State, Wilbur Ross. We received 88 names from the booth activity and an additional 66 names from a TEAM Texas hosting event. • The International Food Technology Conference as cancelled due to the City Council meeting on June 26, 2017. • State Representative Gary VanDeaver was in Paris for a Town Hall Meeting. He asked to meet for an update on business and industry in Paris. • Project Sun Bird is still active. We are talking with them on how New Market Tax Credits could fit their activity at the business park. • 2017 -2018 Budget will need to be completed by the Board and given to City Council for approval. Convene into Executive Session: Convene into Executive Session pursuant to Section 551.087; Deliberation of Economic Development Negotiations to deliberate Commercial and Financial Information and Economic Incentives relating to the following: Commercial real- estate development. • Project Good Intentions PEDC Board Meeting Minutes July 21, 2017 Page 6 of 6 Chair Manning convened the Board into Executive Session at 11:31 a.m. Reconvene into Open Session and possibly take action on item(s) discussed in Executive Session. Chair Manning reconvened the Board into open session at 11:50 a.m. No action was taken from the discussion that took place in Executive Session. Discuss Future Asenda Items. No future agenda items were discussed. Adi ourn Mr. Hughes made a motion to adjourn. Mr. Banks seconded the motion. Vote was 5 -ayes to 0 -nays. The meeting was adjourned at 11:51 a.m. Respectfully submitted, Paula Brownfield Administrative Assistant Paris Economic Development Corporation