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1994-06-30-PEDC 46 MINUTES OF THE PARIS ECONOMIC DEVELOPMENT CORPORATION June 30, 1994 The Paris Economic Development Corporation met in a regular meeting on Thursday, June 30, 1994, at 4:00 P.M., in the City Hall, City Council Chambers, Paris, Texas. Chairman Philip R. Cecil called the meeting to order with the following board members present: Curtis Fendley, Leon Williams, Dick Amis and Barney Bray. Also present were ex-officio board members, Ike Jewett (representing Gary Cunningham), Don Shelton, Bobby Walters, Michael E. Malone, City Manager, and T. K. Haynes, City Attorney, as counselor. 47 Chairman Philip Cecil stated the next item on the agenda was approval of the minutes from the previous meeting of the Paris Economic Development Corporation. Chairman Cecil asked if there were any corrections or additions to the minutes of the -- previous meetings and there was 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. Gene Anderson, Finance Director, to go over the financial report. Mr. Anderson explained he would be making changes in the format in the future, but the information presented today is the City standard budget report that shows the budget for the year, amount spent during the month, amount expended year-to-date, the percent of the budget expended, and the unexpended amount in the last column. He said expenditures have not been closed out for the month of June. He said basically the report shows expenditures on the B & W Sewer Line, some postage expenses and consulting fees. He noted that the figures in the lower left hand columns show the cash balance in the bank, the sales tax collection for the month of June, and the year-to-date collections from sales tax. Mr. Anderson asked for questions. Board member Barney Bray questioned interest being earned. Mr. Anderson said that was one of the formate changes that will be made. He said he felt the interest earned year-to-date was approximately $2,020.00. Mr. Bray said he brought this up in connection with the method used in paying for the street job. Mr. Anderson said they are drawing interest on the money until the time the money is paid out to a contractor. Board member Bray said if they are asking for a one check payment on the road job, if the Board pays it out as they make draws, then they may earn $300.00 to $400.00 in interest over that period of time. Chairman Cecil asked for questions, and he said he would like for Mr. Anderson to stay until they discuss the budgeting process in case there are questions. Chairman Cecil asked City Manager Malone to discuss Item No. 3 on the agenda which was authorizing the City's reimbursement for the "Soup Street" Paving Project. City Manager Malone stated the City Engineer was present at the last meeting to describe the project. He said the total bid on the project was $163,276.18 of which the City will contribute, if approved by the City Council, $20,000.00 plus the engineering time of the City Engineer. He said he felt the project was about to get underway and should be completed some time in September. Chairman Cecil questioned the City Manager as to the method the City was to be paid under the contract. Mr. Malone said it would probably be a draw situation as they complete certain portions of the work. Chairman Cecil asked if they had ninety days to completion. City Manager Malone and City Attorney Haynes agreed. Chairman Cecil said then they are actually looking at the end of September and they agreed. 48 Chairman Cecil said at the last meeting the Board discussed the project but did not take any action. He said at that time they discussed the project and the City's participation in the project, and Mr. Malone is asking the board to fund this project by reimbursing the City as they pay for the work. Board member Dick Amis made a motion to approve the expenditure of $143,276.18 to reimburse the City for the "Soup Street" Project as those expenses are incurred by the City which was seconded by Board member Barney Bray. The motion carried unanimously 6-0. Chairman Cecil said the next item on the agenda was discussion of the budgeting process. City Attorney Haynes read the budget section of the by-laws. Chairman Cecil said he had asked the City Attorney to prepare a rough draft for the Board to work with. Mr. Haynes said this is a bare minimum budget to begin this first year and as the year progresses and expenditures are made sub-accounts will be identified as necessary. Mr. Haynes said this budget is based upon the authorized, directed methods for projecting the income for the year as the State directed. Chairman Cecil said Mr. Anderson has the estimated income at $700,000.00, and the law provides that the Board can spend up to 10% of their income on promotional activities. Mr. Cecil said by-laws provide for the $100,000.00 to be set aside without being identified as to use. Mr. Cecil asked for the City Attorney's comments. Mr. Haynes said with the agreement of the City Council the total fund could be expended if justified. Mr. Cecil stated he felt it would be wise to have some type of contingency reserve, but he did think there would be circumstances when the Board would need to be able to use that amount. The City Attorney Haynes said it would require the agreement of the City Council to expend those funds. After discussion, Mr. Cecil suggested some type contingency fund available where the Board could ask the City Council to give the authority to use those funds if the need arises, and then the decision is made at that time. City Attorney Haynes said the contingency fund will build up and the Board will eventually have money for the extraordinary deal. Board member Bray said in relation to the contingency fund he did not feel the Board had any contingencies except for projects, so why have the fund where it cannot be used when needed. He said the Board needs the money to retain people or companies in Paris, or to bring new business to Paris. Mr. Amis said he was interested in not designating the fund as a permanent fund and have the restricted amount be zero. Mr. Cecil said he has a real problem with segregating funds that the Board cannot reach. Mr. Cecil stated for the purposes of this budget discussion, if he is understanding the other board members, they want that number to be zero or to be labelled unrestricted. Mr. Cecil said the unrestricted portion of the budget is the new industry projects and existing industry projects. 49 Mayor Shelton stated he felt the Board would find that the Council would try to work with the Board. City Attorney Haynes stated this was a compromise item. He said there would be a reserve put there that would be allowed to accumulate with no restrictions as to the rate. Mr. Haynes said the fact that it was there would not mean that the Board could never spend it but Council's approval would be required. Mr. Cecil stated the way the by-laws are written the amount could be zero. Chairman Cecil stated he it was consensus of the Board for the purposes of this initial budget for the number to be zero. Mr. Anderson stated fund balance as it is referred to in accounting is a line item that will show up on the balance sheet as money taken in and spent which could be either restricted or unrestricted. Chairman Cecil stated it was the consensus of the Board that it would all be unrestricted. Chairman Cecil stated he would like to address concerns he had about accumulating money in a fund to take care of any new projects that might be forthcoming. He said up to this point the Board is spending the money taken in, and if the Board had to fund a major project for a new industry there would be no money available. He said he felt the Board needed to continue to support existing industry, but also needed to accumulate some money for new projects. He said, if it was the consensus of the Board, rather than designating the whole amount difference available for projects that some be segregated as available to existing industry projects and part of it as available for other projects until a sufficient amount is accumulated then the requirement could be removed. He said what he is suggesting is 25% for existing industry and 75% for new projects until a certain amount of money is accumulated. Mr. Amis said the Board knows there are other projects beyond Soup Street which have to be dealt with, and a 25-75% split will not pay for all of them. Board member Bray questioned whether the Board wanted to be the one to fund those projects. He said he was not saying that the Board should not be willing to help existing industry, but there should be money available to attract new industries. He said he felt the Board should make a commitment to set so much money aside to attract new industry. Board member Amis noted the vehicles which are in place through the State to leverage cash flow. Board member Fendley said he thought the budget could be adjusted during the year if there was an emergency project and money was needed. Chairman Cecil stated this would be set up as a guideline. Chairman Cecil stated he felt it was the consensus of the Board to establish this concept and it was just a matter of the percentages. City Attorney Haynes said one of the primary tools for attracting new industry are the recommendations of existing industry regarding treatment. Board member Fendley suggested a 60% - 40% split with the carryover. Chairman Cecil stated he had no objection to a 50% 50% split. Chairman Cecil suggested that the Board go with a 50% 50% split, and if the Board sees they need to amend the budget during the year, this can be accomplished and would be a guideline for the Board. Chairman Cecil summarized the $100,000.00 will be added to the $205,000.00 plus the $275,000.00 and then that will be divided 50 50 and then the $70,000.00 will be left as it is. He also said the $25,000.00 for the City will remain as an estimate and the Chamber compensation is a fixed amount. After discussion, this was the consensus of the Board. 5O Board member Amis made a motion, seconded by Board member Fendley that the Budget as discussed at this meeting be adopted for Fiscal Year beginning October 1, 1994, and ending September 30, 1995, with the New Industry Projects amount being $290,000.00, Existing Industry Projects amount being $290,000.00, with a Debt Service or Force Account Subtotal of $580,000.00, and it removes the by-law reserve contingency of $100,000.00, and the rest remains the same assuming an income of $700,000.00. The motion carried unanimously. RESOLUTION NO. 94-002 WHEREAS, the Paris Economic Development Corporation, in keeping with its bylaws, is obligated to have a budget prepared and approved and delivered to the City Manager of the City of Paris on or before June 30 of each year; and, WHEREAS, the budget attached hereto as Exhibit A is hereby presented by the Secretary-Treasurer, and it is appropriate that such budget be approved; NOW THEREFORE; BE IT RESOLVED BY THE PARIS ECONOMIC DEVELOPMENT CORPORATION, that the budget attached hereto as Exhibit A be, and the same is hereby, approved; and, BE IT FURTHER RESOLVED, that the Secretary-Treasurer be, and he is hereby, directed to deliver the budget attached hereto as Exhibit A to the City Manager of the City of Paris. PASSED AND ADOPTED this 30th day of June, 1994. Philip R. Cecil, President Curtis Fendley, Vice-President Rihard M. Amis, Secretary-Treasurer Leon Williams, Director Barney Bray, III, Director ATTEST: Richard Amis, Secretary-Treasurer APPROVED AS TO FORM: T. K. Haynes, City Attorney 51 City of Paris Budget Preparation Worksheet Economic Development Council 2 Chairman Cecil asked if there was any other business and there being none he declared the board meeting adjourned. CHAIRMAN PHILIP R. CECIL ATTEST: Barbara Denny, Assistant City Clerk