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05.22.2013 PEDC MinutesProsper ECONOMIC DEVELOPMENT CORPORATION MINUTES Meeting of the Prosper Economic Development Corporation 170 N. Preston Rd., Suite 50 Prosper, Texas 75078 Wednesday, May 22, 2013 - 6:00 p.m. Call to Order and Announce a Ouorum is Present Board President Jim Wicker called the meeting to order at 6:05 p.m. Board members present were Jim Wicker, Ray Smith, Gary Reno Jones, Gary Jackson, and David Bristol. Board members Jordan Simms and Kevin Drown were absent. PEDC Executive Director Robert Winningham and PEDC Economic Development Specialist Garrett Weaver were present. Guests included Prosper Town Council member Kenneth Dugger. 1. Comments from Citizens (The EDC may receive input from citizens only on topics that are not listed on the meeting agenda) There were no comments from citizens. 2. Approval of Minutes from the Regular Meeting on April 17, 2013 The April 17, 2013 Minutes were approved with a motion from Gary Jackson and seconded by Mayor Ray Smith. The motion passed unanimously. 3. Approval of PEDC Financial Reports Reno Jones presented the April, 2013 Financials. Jones said that the financials provided to him were satisfactory. Robert Winningham asked if the $8,900 incurred under Legal Fees will be paid for by the Town. Board President Jim Wicker noted that most of the aforementioned fees had been charged to the PEDC. and stated that Town Manager Harlan Jefferson and Robert Winningham would work to determine if some of the fees and costs incurred by the PEDC will be divided between the Town and PEDC. Jones noted that cash on hand dropped slightly below $2 million. Winningham stated that 75-percent of the aerial map has been paid for, which accounts for the drop in cash on hand. Mayor Ray Smith noted that the Town had renegotiated rates with Basic Tex Pool to a rate of 0.08%. Jones made the motion to approve the Financials. The motion was seconded by David Bristol and was unanimously passed. 4. Report of the Finance Subcommittee and Any Action on Recommendations from the Subcommittee Robert Winningham presented the Minutes of the May 2, 2013 meeting of the Financial Subcommittee. Winningham outlined all that was discussed in the meeting and what action PEDC staff is to take prior to the next Financial Subcommittee meeting. Gary Jackson explained that there were essentially three main areas for PEDC Board and Staff to focus on as a result of the previous Financial Subcommittee meeting: 1) determining the deal that the PEDC has with the Town as far as financials are concerned, 2) the PEDC's responsibility of funds and who assumes responsibility of the PEDC's commitments should the PEDC become defunct, and 3) the need to improve overall financial reporting by knowing exactly what funds the PEDC is committed to and to record expenditures (such as incentives) under the time in which they are voted. Mayor Ray Smith asked if the Subcommittee discussed how dollars committed for projects would be recorded. Jackson stated that committed funds should be set aside as obligated dollars. David Bristol agreed and asserted that committed funds should be automatically deducted from the cash flow statement. Jackson mentioned that the PEDC should acquire guidelines, or best accounting practices, from other cities and EDCs in the area. PEDC Minutes —page 2 May 22, 2013 Board President Jim Wicker questioned how the PEDC should encumber large financial commitments moving forward. Winningham suggested creating a cash flow chart in order to keep track of funds and to know exactly how much money is dedicated to future commitments. Bristol asked how much capacity the Town has with the PEDC and if there is a written agreement in place between the Town and PEDC. Jackson noted that the existence of guidelines or an agreement is not currently known. Bristol stated that the Town is liable for any PEDC obligations. Winningham added that if the PEDC Board was ever dissolved, the Town Council would then be held accountable for any PEDC Board obligations. Winningham discussed the proposed items for the next Subcommittee meeting and that action may be taken coming out of the next meeting. Winningham added that the next Financial Subcommittee meeting would most likely occur in June. No action was taken at this time. 5. Consider and Take Action on Amendments to FY2013 Budget Robert Winningham proposed amending the FY2013 Budget to allow for various increases in the budget over the course of the previous budget year. Winningham proposed that the budget be increased to allow for the incentive payment of $396,000 to Matthews Southwest. David Bristol asked why the payment to Matthews Southwest is $396,000. Winningham explained that the incentive budget was previously set to $104,000 for FY2013 and the PEDC paid $500,000 to Matthews Southwest, thus the reason for the $396,000 increase. ( Winningham also proposed a budget increase of $35,000 to cover salary and benefits for the addition of the Economic Development Specialist position, and proposed to add $20,000 to the Legal Fee budget which will provide flexibility for the remainder of the budget year. Gary Jackson proposed to add funds to Marketing instead of moving funds. Winningham suggested adding the Chapter 380 Program Grant line item to the Project Incentives line item, to which the Board agreed. Gary Jackson made the motion to approve the Amendments to the FY2013 Budget as presented and discussed. The motion was seconded by Reno Jones and was unanimously passed. 6. Consider and Take Action on Recommendation of Tax Abatement Guidelines to the Prosper Town Council Robert Winningham presented a draft of the Tax Abatement Guidelines to be presented to the Prosper Town Council. Winningham explained that the Guidelines were to be generated by the PEDC and to be approved and recommended by the PEDC Board to the Town Council every two years as required by the State Tax Code. Winningham noted that Tax Abatement Guidelines have not been approved since 2005. Mayor Ray Smith asserted that the Guidelines could possibly be leveraged against the PEDC when it comes to cities and towns competing against Prosper for prospective businesses. Board President Jim Wicker added that the Guidelines could be beneficial and utilized during negotiation for a project. Wicker suggested striking Section III, Paragraph 2 and Figure I from the Guidelines. David Bristol also suggested that the Guidelines should be as flexible as possible. David Bristol made the motion to remove Section III, Paragraph 2 and Figure 1 from the Tax Abatement Guidelines. The motion was seconded by Ray Smith and was unanimously passed. 4 PEDC Minutes -page 2 May 22, 2013 7. Convene into Closed Executive Session: Pursuant to Texas Government Code, Section 551.087; Deliberation of Economic Development Negotiations: To Deliberate Commercial and Financial Information and Economic Incentives for the following: Board President Jim Wicker called the meeting into executive session at 7:00 p.m. • Prosper Business Park • Retail Development • Project Star Gazer Board President Jim Wicker reconvened the meeting into regular session at 8:03 p.m. 8. Take Any Action Necessary as a Result of Executive Session No action was taken at this time. 9. Town of Prosper Report Mayor Ray Smith gave an update on various projects and issues for the Town of Prosper 10. Executive Director's Report: Administrative and Marketing Activities of the PEDC and Upcoming Events PEDC Executive Director Robert Winningham presented updates on projects in which PEDC staff is working. Additionally, he discussed PEDC Staff's recent trip to the ICSC RECon trade show in Las Vegas the previous week. Winningham said the trip was very successful and noted that he and Garrett Weaver held several productive meetings at the trade show, made many new connections, and discovered good potential leads for future projects in Prosper. 11. Adjourn The PEDC Board meeting adjourned at 8:14 p.m. with a motion from Ray Smith and seconded by Reno Jones. The motion was unanimously passed. David Bristol - PEDC Secretary G-ice- �3 Date