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10/14/2014 MINUTESPARIS ECONOMIC DEVELOPMENT CORPORATION MONTHLY MEETING Tuesday, October 14, 2014 MINUTES Board Members Staff Present: Stephen Grubbs, Chair Present: John Brockman, Vice Chair Rebecca Clifford, Secretary /Treasurer Don Wilson David Turner Ex- Officio Members Guest(s) Present: John Godwin, City Manager Present: Matt Frierson, mayor Legal Counsel: None City Council Liaison: Edwin Pickle Shannon Barrentine Interim Executive Director Chassidi Taylor Admin. Assistant Connie Beard, The Paris News Ray Banks Nick Murillo, eParisExtra Anna Spencer Anna Upchurch Clint Upchurch Kent Klinkerman Carol Hufnagel Sue Lancaster, Paris City Council Stephen Grubbs called the meeting to order at 4:01 p.m. and welcomed those present. Confirmed a quorum was present. Discuss and possibly take action on SEALED BIDS to purchase four (4) lots owned by the Paris EDC located at 1546 S. Church Street as posted in the Legal Notices of The Paris News on August 31 and September 7, 2014. Only one bid had been received for consideration. Upchurch Machine bid $30,482.00 for four (4) lots located at 1546 South Church St. Included was a cashier's check in the amount of $500.00 made to the PEDC, as required. The minimum bid was $25,400.00. David Turner made a motion to sell the land for the bid amount of $30,482.00 to Upchurch Machine; seconded by John Brockman. Motion Carried4 -0 PEDC Board Meeting Minutes October 14, 2014 Page 2 of 7 Mr. and Mrs. Upchurch left at 4:06 p.m. Approval of minutes from the September 9, 2014 regular meeting; September 15 2014• joint meeting with the Paris City Council: and September 19 2014 called meeting Don Wilson made a motion to accept the Minutes as submitted for September 9a' 2014; second by David Turner. Motion Carried 4 -0. Don Wilson made motion to accept the Minutes as submitted for September 11th 2014; seconded by David Turner. Motion Carried 4 -0. John Brockman made motion to accept the Minutes as submitted for September 19a' 2014; second by David Turner. Motion Carried 4 -0. Approval of September 2014 financials Shannon Barrentine told those present that financials would not be available for another two weeks due to fiscal year end. Interim Executive Director's Report: • Visit to Kilgore and Tyler on "best practices" September 29, 2014 pertaining to Tax Abatement and Incentive Agreement compliance. Shannon Barrentine, Edwin Pickle, Rebecca Clifford, Don Wilson, and Janice Ellis, City Clerk, traveled to Kilgore EDC and Tyler EDC. Shannon Barrentine stated that it was a very beneficial trip and she echoed what Edwin Pickle stated at the city council meeting the evening before. There was a lot of good documentation that probably needs to be incorporated in various areas of our compliance. The Executive Director at Kilgore EDC has been there 25 plus years, as well as,the Executive Director in Tyler. They know what works and what doesn't work in Economic Development. Don Wilson stated that it was very informative and you can see that they have been down the same road we have. It's interesting to see that if a company said they would have 100 employees at the end of the year and they only had 90 they paid 90% of the incentive agreement and they worked it out. Tyler's incentive agreement states that if they don't make 75% it rolls over to the next year and if you go over 75% they pay the company, if no change, they don't pay. A lot of good information was sent to us. To be consistent and industry friendly a template to go by was well worth the trip. Don Wilson stated that Tyler EDC gets zero tax payer money it's like the old Paris Industrial Foundation if you want to be on the Tyler EDC Board you have to pay a minimum of $2,500 dollars a year dues to be a member of the Tyler EDC. The Tyler Board is picked from EDC members. They go through the same steps with the city but the city takes all the sales tax money and they use it specifically for infrastructure and bond payment. We PEDC Board Meeting Minutes October 14, 2014 Page 3 of 7 have a 50 cent ad valorem tax and Tyler's is 19 cent ad valorem tax. So when an industry comes to town, Tyler doesn't have the million dollars to give them but they have a low property tax rate and take the taxes and pay fire, police, road improvements and things like that. Tyler told us very few towns could pull this off and they were one of them. Shannon Barrentine stated that Tyler is still connected to their chamber. The director is over the chamber and the EDC. Shannon Barrentine stated that the industry pitches in for the annual revenues. The population in Kilgore is 14,000 in the city. They get the full half cent of sales tax revenues. Kilgore generates $3.2M from sales tax for Economic Development with less than half the population of Paris. Shannon Barrentine stated that oil and gas point of sale is what generates the revenues for Kilgore. Kilgore doesn't incentivize oil and gas industry they want to diversify their community. Kilgore also doesn't have bankers or realtors on their Board of Directors. Don Wilson stated the PEDC and the city need to sit down and iron everything out. Edwin Pickle stated that we made our incentive agreements difficult. Whereas, Tyler and Kilgore have been successful by keeping them simple. Rebecca Clifford joined the meeting at 4:06 p.m. Update from the Workshop that was held in Austin on September 23, 2014 pertaining to the Property Accessed Clean Energy (PACE) Program in Texas. Shannon Barrentine stated that she went the Austin PACE Workshop, on September 28, 2014. There were about 50 people in attendance of all variations of industry and finance. The actual attendance list was in the meeting packet. Upon her return, she sent John Godwin, City Manager; Pam Anglin, PJC President; Chuck Superville County Judge; Jerry Patton, Chief Appraiser; and Reeves Hayter, engineer the PACE Program information. A meeting has been scheduled for November 4, 2014 to discuss how we can get the PACE program off the ground and offered to our industries and citizens in Lamar County. Stephen Grubbs said he had heard the PACE Program pitch and it seems to be worthwhile. Shannon Barrentine stated that on November 12, 2014 in Canton, Texas, there will be a Northeast Texas Economic Development and Roundtable (NETEDR) Meeting; Steven Minick, will speak on the PACE program. • Chamber Banquet 2014 The Chamber Banquet will be held Tuesday, October 28, 2014 at the Love Civic Center in Paris, Texas. The PEDC had purchased a table of eight. PEDC will present the Industrial Appreciation Award that night. PEDC Board Meeting Minutes October 14, 2014 Page 4 of 7 • Industry Appreciation Week, October 27 -31 2014• RK Hall Construction - Tuesday, October 29, 2014 at 8: 30 a.m. Campbell's Soup Company - Wednesday, October 29, 2014 at 7:30 a.m. Paris Junior College - Friday, October 31, 2014 at 8:30 a.m. Kimberly -Clark Corp. - Thursday, November 6, 2014 at 8:00 a.m. • Sales Tax Workshop in Northeast Texas region by Texas Economic Development Council in early 2015. Shannon Barrentine stated the Texas Economic Development Council (TEDC) doesn't provide sales tax workshops during the bi- annual legislative sessions. The laws change and they want to make they have the cutting edge of the new laws. Sales Tax Workshops currently available in 2015: Richardson -June 26, 2015; Abilene - August 28, 2015 and Houston - September 18, 2015. The last Sales Tax Workshop for 2014 is December 12, in Austin. Deadline for registration is December 1, 2014at a cost of $175. Shannon Barrentine stated that the Sales Tax Workshop is one day from 8:00 a.m. to 4:00 p.m. Stephen Grubbs, Don Wilson, and Edwin Pickle stated that they would be interested in attending in December. John Brockman stated that he didn't know and David Turner stated that he would not be going. Discuss and Possibly take action on land acquisition for a future City of Paris EMS Station to be located in the Northwest Industrial Park. —John Godwin John Godwin, City Manager, stated that the Emergency Management Services (EMS) is looking for 2 acres, maybe more, depending on the location. David Turner stated that there would be nothing better that would enhance the industrial park. EMS would like to be closer to 19th street NW with controlled access to reduce risk. Being on the NW loop would make it easier to respond when there are calls in the City. It would enhance the response time especially to Hwy. 82 West and the west portion of Lamar County. Stephen Grubbs stated that there was a tract of property, just west of the industrial park, of about 6 acres that we can talk about. Shannon Barrentine stated that there is no water or sewer service to the 6 acre tract. She added that the city can grant a variance for sewer by allowing a septic tank. Don Wilson stated that we need to make sure we take a look at it and make sure we are making the right decision. No action was taken on this item. PEDC Board Meeting Minutes October 14, 2014 Page 5 of 7 Discuss and possibly take action on Program of Work for FY 2014 -2015. Shannon Barrentine stated that she would like to add the Property Assessed Clean Energy (PACE) Program to the 2014 -15 Program of Work and to continue to pursue the ACT Certified Work Ready Communities initiative. Shannon Barrentine stated that the PEDC is still trying to market the airport. John Godwin stated that they (City) received another TXDOT grant for hangars. Stephen Grubbs stated that PEDC had made progress on some of the goals in the 2013- 14 Program of Work. Don Wilson stated that he is very concerned about the incentive agreements that have been pending for a year. Don Wilson asked if the airport was a City projector PEDC project? Shannon Barrentine stated it is a planned development for industry of the surrounding property of the airport. Stephen Grubbs stated that he and Rebecca Clifford are on the Airport Sub - Committee and attend the meetings. Stephen Grubbs stated that the airport doesn't have hangar space and that would be a nice addition to the area around the airport. Stephen Grubbs said let's not rush this, let's all take the time to look over it and put some thought and consideration into the Plan of Work for 2014 -15. Stephen Grubbs made the motion to bring it back to the next meeting and Shannon Barrentine will send it to the council for approval at their next meeting; seconded by David Turner. Motion Carried 5 -0. Discuss and possibly take action re2ardin2 Defenbaugh & Associates' contract and final payment. Stephen Grubbs stated that Defenbaugh will send the documents to Jeff Moore. Jeff Moore said that he would send Defenbaugh's final check payment when Mr. Moore receives the documents that are requested. Stephen Grubbs stated that he is no longer able to get a hold of Mr. Defenbaugh. PEDC received a letter from Mr. Defenbaugh's attorney. Jeff Moore has created an exchange agreement that stipulates Defenbaugh& Associates to turn over all documents as requested to Jeff Moore. Jeff Moore will then give Defenbaugh & Associates the final payment. Don Wilson asked if that information was protected under attorney client privilege? PEDC made a contract directly with Defenbaugh. Defebaugh's reply stated that the PEDC has everything because they provided them to me isn't. John Brockman asked then how are we going to know if we have everything? Matt Frierson left at 5:03 p.m. Don Wilson stated that Mr. Defenbaugh is not talking to the PEDC and it doesn't make any sense; the whole thing doesn't make sense. Don Wilson stated that Rebecca Clifford signed the contract. What do you think Rebecca Clifford? Rebecca Clifford responded to pay him ( Defenbaugh). Don Wilson stated that Kent McIlyar asked for the report that we paid for, that went to the FBI, do we have that report? Edwin Pickle stated that city council doesn't know PEDC Board Meeting Minutes October 14, 2014 Page 6 of 7 what he sent to the FBI. Don Wilson stated that he wants the report he sent to the FBI, Mrs. Lancaster asked for them as well. Edwin Pickle stated that we don't know if we are getting all or 75% of the documents. Kent McIlyar didn't open the report. It was sealed and sent to the attorney general 75% or 100% we don't know. Rebecca Clifford stated that she sent the contract to Kent McIlyar to look over and she signed it. Don Wilson asked if there were any changes that he asked you to make to the contract? Rebecca Clifford stated that he mentioned sending it to him and or using drop box. Don Wilson stated Kent McIlyar sent you some changes that weren't made to the executed contract. Rebecca Clifford stated that she signed what she thought was the right contract. Don Wilson stated that there were certain things that the Kent McIlyar wanted added to the Defenbaugh contract and they weren't. Edwin Pickle stated it's too late. David Turner stated that PEDC should turn over the check to Jeff Moore so he ( Defenbaugh) gets paid. Don Wilson stated that Rebecca Clifford signed the contract against attorney advice several items that weren't changed minor changes and one that was significant that was against the advice of Kent McIlyar. Rebecca Clifford stated, I signed the contract, what do you want me to do? Stephen Grubbs stated that he didn't think any Board member saw that agreement, it was all done backwards, bad agreement and a bad investigation. We will learn and do better moving forward. David Turner made a motion to turn the Defenbaugh check over to Jeff Moore and go forward with the plan of the exchange agreement; seconded by Stephen Grubbs. Motion Carried 5 -0. Discuss and possibly take action pertaining to Incentive Agreements for T &K Machine and Potters Industries Rebecca Clifford stated that she is making a template for all incentives not just for T &K and Potters. No action was taken. Discuss and possibly take action on seeking Statement of Qualifications from local attorneys to assist with legal issues pertaining to PEDC organization Shannon Barrentine will contact local attorneys. Shannon Barrentine stated that the deadline should be November 3 or 4 so we can have a spreadsheet of their qualifications. David Turner made a motion to request the Statement of Qualifications from local attorneys, with a deadline of November 3 or 4 for submittal to the PEDC; seconded by Rebecca Clifford, Motion Carried 5 -0. Discuss and possibly take action on release of incentive agreement payment to HWH/Rogers Wade that was approved at the August 21, 2014 called meeting Don Wilson recused himself from the HWH/Rodgers Wade discussion. Rebecca Clifford made a motion to table this item and she and Edwin Pickle will work on gathering all the information; seconded by Stephen Grubbs. Motion Carried 4 -1 with Don Wilson abstained. PEDC Board Meeting Minutes October 14, 2014 Page 7 of 7 Discuss and possibly take action on addition to PEDC policy manual of non - solicitation clause for PEDC personnel — Rebecca Clifford John Godwin will bring the document to the next Board meeting. Rebecca Clifford made the motion to table this item; seconded by John Brockman. Motion Carried 5 -0. Discuss and possibly take action on invoice(s) for legal services from Jeff Moore, Attorney, Brown & Hofineister, LLP David Turner made a motion to pay the invoices, as submitted; seconded by Don Wilson. Motion Carried 5 -0. Discuss and possibly take action on "next steps" pertaining to the search for an Executive Director — Stephen Grubbs Stephen Grubbs asked the Board if it was a good time to pursue an Executive Director? We want the best candidate, does PEDC want to continue the search or postpone the search? David Turner made a motion to put the search for an executive director on hold until the beginning of the year. Due to the current politics an applicant withdrew because of what he read in the paper. Have Mrs. Barrentine continue as Interim Executive Director; seconded by John Brockman. Motion Carried 5 -0. The Board convened into Executive Session at 4:54 p.m. Pursuant to Section 551.072, 551.074 and Section 551.087 of the Texas Government Code to discuss and deliberate on the following: 1. Pursuant to Section 551.072 — Real Property 2. Pursuant to Section 551.074 — Personnel 3. Pursuant to Section 551.087 — Economic Development Negotiations Executive Session ended at 5:53p.m. The Board reconvened into open session. As a result of executive session discussion the Board took no action. David Turner made a motion to adjourn 5:55p.m.; seconded by Rebecca Clifford. Motion Carried 5 -0. Respectfully submitted, Chassidi Taylor Administrative Assistant Paris EDC