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09/17/2019 MinutesPARIS ECONOMIC DEVELOPMENT CORPORATION MONTHLY MEETING Paris City Council Chambers 107 East Kaufman St. Paris, Texas 75460 Tuesday Se ;:tember 172019 4:00 O'CLOCK P.M. Board Members Present: Tim Hernandez, Chairman Mihir Pankaj, Secretary/Treasurer A.J. Hashmi Ex -Officio Members Present: Pam Anglin, PJC President Paul Allen, Lamar County Chamber President Gene Anderson, Interim City Manager Linda Knox, City Council/District 5 Legal Counsel: Stephanie Harris Call to Order. Staff Present: Michael Paris, Executive Director Chris Stout, Economic Development Associate Paula Brownfield, Administrative Assistant Guest(s) Present: Mary Madewell, The Paris News Brad Nutt, Norment & Landers Rudy Kessel, Norment & Landers Glen Bawcum, Citizen Carl Cecil, Lamar National Bank Sims Norment, Norment & Landers Josh Bray, Sanitation Solutions Derald Bulls, PJC Jeff, Nutt, Guaranty Bank Pike Burkhart, The Smart Wagon Corp. Chase Coleman, Liberty National Bank City Council Liaison: Paula Portugal Mr. Hernandez called the monthly meeting of the Paris Economic Development Corporation to order at 4:00 p.m. on September 17, 2019. Invocation Mr. Anderson gave the invocation. Citizens' In�)ut Mr. Hernandez invited those present to speak during Citizens' Input. • Mr. Carl Cecil, 525 Amherst Road, came forward. He stated that two years ago the voters approved a strong PEDC with funding and control by the PEDC. He asked that the PEDC PEDC Board Meeting Minutes September 17, 2019 Page 2 of 5 Board vote against any changes to the bylaws regarding funding approval or project approval. His opinion is that the City has enough oversight. • Mr. Sims Norment, 606 Church Street, was the second citizen to come forward. His view was that the PEDC's job of bringing jobs to Paris is the most important job in city government. The City Council appoints the PEDC members, approves the PEDC budget and any expenditures above $400,000.00. His view is the Council has adequate control. • Mr. Glen Bawcum, 5366 FM 195, stated that he was strongly opposed to City Council approval of all programs and expenditures made by the PEDC. He went on to say that the City Council appoints uniquely qualified Board Members to promote economic development in Paris and Lamar County. If the City Council will require approval of all expenditures, it takes away the authority of the PEDC Board. In November of 2017, by an overwhelming majority the voters felt the quarter cent sales tax was best suited to be used by the PEDC Board. His view is that taking away this authority from the PEDC is a mistake. Mr. Bawcum asked those present to stand if they agreed with him and the prior speakers. A majority of the crowd stood in agreement. • Mr. Pike Burkhart, 524 South Church Street, stated that the PEDC has plenty of oversight from: the City Manager, the City Council, the County Judge and the City Mayor. The proposal to change the bylaws would actually smother the entrepreneurial spirit of the PEDC Board. His view is to not change the bylaws. Mr. Hernandez closed the Citizens' Input. Discuss and ossibl a grove Minutes of the August 20 2019 MonthI Meetiin . Mr. Hernandez asked for approval of the August 20, 2019, minutes. Dr. Hashmi made a motion to approve the minutes. Mr. Pankaj seconded the motion. Vote was 3 -ayes to 0 -nays. Discuss and,ossibly a , grove Au' ust 2019 Financials. Mr. Pankaj pointed out on the Cash Out sheet that Personnel expenses were higher due to one extra pay period. The Administrative expenses were all in order for the month. Under the Marketing/Airport the NBAA (National Business Aviation Association) was registration for an event and under Marketing/Video advertising was done on Facebook to boost the videos reach. Our Marketing shows that the expenses are broken down to show each expense. New Industry Projects shows Nabors Demolition for $196,400.00. Mr. Paris said that the Nabors bid was $178,000.00, but because of the additional slab they found under Oliver Rubber an addendum was added to their contract. The total expenses for August were $267,457.49. Dr. Hashmi made a motion to approve the August financials. Mr. Pankaj seconded the motion. Vote was 3 -ayes to 0 -nays. Discuss andossibl a :grove Bud yet Amendments for the 2418-2019 Bud met. Mr. Pankaj stated there were $14,000.00 in changes for the Personnel expenses, but the same amount was taken from the Administrative expenses. The changes made are budget neutral. Debt Service expenses include the SW Business Park and the American SpiralWeld loan. New Industry Projects expenses include American SpiralWeld and the SW Business Park. Both projects incurred expenses after the initial budget was completed to the 2018-2019 fiscal year. The budget amendment adds in $629,757.70 to our budget making our total budget $3,719,707.70.. Dr. Hashmi made a motion to approve the budget amendments for the 2018-2019 fiscal year. Mr. Pankaj seconded the motion. Vote was 3 -ayes to 0 -nays. PEDC Board Meeting Minutes September 17, 2019 Page 3 of 5 Discuss and ossi:bly al!R_rove naming the Southwest Businesses "Gene Stallings Business Park". Mr. Hernandez asked for discussion and approval of naming the SW Business Park, the "Gene Stallings Business Park". Dr. Hashxni made a motion to approve naming the Southwest Business Park. Mr. Pankaj seconded the motion. Vote was 3 -ayes to 0 -nays. Discuss and possibb, act on amendments to the PEDC B ly aws tore uire city council a ;removal of all pro rams and ex enditures of the cor oration. Dr. Hashmi read the Bylaws Section 10.04, Amendments to Bylaws: "The Bylaws may at any time and from time to time be amended, provided that the Board files with the City a written application approved by the affirmative vote of four (4) or more members of the voting Board requesting that the City approve such amendment". He stated that the PEDC Board does not have four (4) Board Members today for a vote and there will only be a discussion. Mr. Hernandez agreed that the Board would only have a discussion today. Ms. Harris, City Attorney, explained that the Economic Development Act provides that "the Corporation's authorizing unit, the City of Paris, will approve all programs and expenditures of a corporation" under Local Government Code Section 501.073(a). She went on saying that she could not tell the PEDC that the existing PEDC Bylaws are illegal. Ms. Harris stated the PEDC projects need to be approved by: 1) by having them in the budget for the next fiscal year or, 2) on a project by project basis. Ms. Harris told the PEDC Board in a vast number of the cities the EDC takes each project to the city for approval. Mr. Hernandez asked how many cities Ms. Harris talked to. Ms. Harris answered that she talked to eight or nine economic development lawyers who represent various cities. Mr. Hernandez indicated the PEDC had contacted sixteen cities in our area and the results: two cities were not Part A; seven cities reported to their city council; and the last seven cities were very similar to the PEDC structure. Of the seven cities that were similar to us: five had complete control over their expenditures with no reporting to the city council; two had reporting requirements with one reporting over $400,000.00 and the other reporting up to $850,000.00. Ms. Harris said she talked to economic development lawyers and TML (Texas Municipal League) and they agreed on either having approval in advance through the budget or on a project by project basis. Mr. Hernandez asked how those who did not report to their city councils get by with it, if it is in violation of the law. Ms. Harris answered that they have different lawyers. To which Mr. Hernandez replied, so then we are not in violation of the law. Ms. Harris again said that she could not tell us 100% that we are in violation of the law. She continued by saying "that the better practice is to get that approval from the City Council because they have that authority; they have that duty under the Economic Development Law". Dr. Hashmi read a part of Section 4.12 which is the Board's relationship with the City; the first paragraph is concerning the $400,000.00 use of money and the second paragraph is saying the City makes PEDC responsible for its duties. Dr. Hashmi's point was that the bylaws already have this in them; so why are we changing the bylaws when this is already stated. Ms. Harris answered back that this is contradictory when the first paragraph is saying that the PEDC does not need approval for anything under the $400,000.00 ' amount and the second paragraph states that you need to have all your programs approved by the City Council. This makes the bylaws contradictory according to Ms. Harris. Dr. Hashmi questioned why we are trying to fix something that is not broken. He went on to say that if the Council thinks it is broken, they can write up an amendment to correct it. Ms. Harris said that they can agree to disagree on the matter. Since there is interest by the Council to change this, Ms. Harris suggested that they bring it before the PEDC first. Dr. Hashmi went on to say that if the PEDC bylaws are not illegal, then the City Council could just let the PEDC know that they are doing something wrong and to correct it. Ms. Harris stated she does not know what a court or the Attorney General would conclude with the PEDC bylaws, but she does think that it will be brought to the Attorney General for an opinion. Ms. Portugal, City Council Liaison, spoke up saying she talked to the executive director of the Texas Economic Development Corporation and considered him to be a better resource than TML Mr. Carlton Schwab told her that they have over 700 over economic development corporations in the state, and of those about one half can spend some amount up to a cap without going to their councils. His reason that the councils agree to a cap was that they do not want to go PEDC Board Meeting Minutes September 17, 2019 Page 4 of 5 through approval of every little item. Ms. Portugal went on to say that she did her own research of cities and found that Sulphur Springs can spend up to $850,000.00. She mentioned that Mr. Schwab did comment that most EDCs did have their own attorneys so there is no conflict and he sees no reason that this would be challenged because so many cities in Texas are allowed to spend some amount. She stated that an Attorney General's opinion is not necessary. Mr. Hernandez agrees that our system is not broken and the PEDC has been very transparent and does not need more oversight. Mr. Pankaj said he does not agree with and is not in favor of a change to our bylaws. He does believe in transparency and would like a time to discuss this with City Council. Ms. Harris stated that this is a discussion and a possible action item; she wanted the PEDC to discuss before it was on a Council agenda. Dr. Hashmi emphasized that this is not just a board, but a corporation. Ms. Harris agreed and said that all EDCs in Texas are unique in being statutory creations. The question is what the bylaws need to say in order to comply with the state. The Board has not always gone before the Council on projects that were more than $400,000.00. Mr. Paris stated that there were two $400,000.00 performance agreements: one agreement had a claw -back that we received money back; the second agreement was fulfilled of jobs on the performance agreement. There was not any. misuse or misguidance of the funds; there was due diligence and Board approval. He feels that the bylaws and how the City Council and the Board work together seem to be amicable. The way the bylaws are designed help Paris work together as a community. There are checks and balances: sharing the City Attorney, having Ex-Officios. Mr. Pankaj says that transparency is most important and the Board wants to work with City Council to look forward to growth and a bright future. Mr. Hernandez stated there were no further discussions and closed the matter. Discuss and L)essiblr�ove the Final Agreement for Iluhtamailu Rail Develo °went. Mr. Paris explained that this is the performance agreement to help establish the rail spur from the North/South rail to the Huhtamaki plant. This agreement retains 220 employees in return for $100,000.00 for the rail. Dr. Hashmi asked if that was the total number that they have. Mr. Paris stated it was and that the rail will make them more competitive with their competition. Mr. Pankaj made a motion to approve the final agreement for Huhtamaki rail development. Dr. Hashmi seconded the motion. Vote was 3 -ayes to 0 -nays. American S �iralWeld Pi ;�e U:�date: • Construction. Progress on construction is going well for American SpiralWeld. Pier drilling is being done on the site. A piece of equipment is being brought here from Europe and is so heavy that over 100 piers are needed to hold it up. • Demolition of the Brownfield. The demo is complete. A tank on the Superior Switch site was dug up and the soil was replaced. On the Oliver Rubber site the soil testing is finished and the site will be excavated and leveled. We are working with the City on tree removal and tree burning on the site. a Phase II Transfer of the Brownfield in October to ASW. October the 16a' is the transfer date and it looks like everything is in order to keep the date. The TCEQ/VCP process is taking place as we do the cleanup on the site. This may keep going after the October 16'" date, but it will not interfere with the transfer. Once the transfer is completed the construction crews will start moving soil on to the site. • Phase III Wetlands Progress. American is looking into other ideas on handling the Wetlands. Their ideas could eliminate some of the PEDC costs. This would also lower our timeline. PEDC Board Meeting Minutes September 17, 2019 Page 5 of 5 Rail Development. Kiamichi Rail is providing us redline on the construction contract. The contract will apply to the switch around Huhtamaki, down Center Street, through the PEDC property and to the American SpiralWeld plant. We will be doing a bid process on our section of the rail. Moore Law Firm is reviewing the construction agreements with Kiamichi Rail. We anticipate that the work will start in January of 2020 and last for approximately six months. Dr. Hashmi asked about the barium found by the rail. Mr. Paris stated that they can replace the iron and the wood without disturbing the dirt; and because they are not disturbing the dirt, we do not need to worry replacing the dirt. Convene into Executive Session: 1) Pursuant to Section 551.087 of the Texas Government Code to (1) discuss or deliberate regarding 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 business prospect described by Subdivision (1), to wit: • Project Pine Tree • Project Iron Shovel Chairman Hernandez convened the Board into Executive Session at 4:45 p.m. Reconvene into 0 en Session and aossibly take action on items discussed in Executive Session. Chairman Hernandez reconvened the Board into open session at 4:57 p.m. No action was taken on any items discussed in Executive Session. Discuss Future A Benda Items. Mr. Paris stated that he would like to explore with the Board the topic of bringing in someone to discuss strategy for us and for the community. He would like to discuss his ideas and who he had in mind. Ad'ourn Dr. Hashmi made a motion to adjourn. Mr. Pankaj seconded the motion. Vote was 3 -ayes to 0 -nays. The meeting was adjourned at 4:58 p.m. Respectfully submitted, Paula Brownfield Administrative Assistant Paris Economic Development Corporation