Odessa Development Corporation

ODESSA DEVELOPMENT CORPORATION MINUTES CITY OF ODESSA, TEXAS May 16, 2024 A regular meeting of the Odessa Development Corporation (ODC) was held on May 16, 2024, at 2:33 p.m. in the Council Chambers, 5th floor, City Hall, 411 W. 8th St. Odessa, Texas. Members present: David Boutin, Kris Crow, Melanie Hollmann, Tim Harry, Larry Robinson, James Kirk, and Jeff Russell. Members absent: Others present: Dan Jones, City Attorney; Christina Buhnerkempe, Legal Assistant; Javier Joven, Mayor; John Beckmeyer, City Manager; Kaylie Banda, Director of Finance; Renee Earls, Odessa Chamber of Commerce; Tom Manskey, Office of Economic Development; Kathi Vaughn, Office of Economic Development; Lindsey Simpkins, Office of Economic Development; James Beauchamp, Motran; Christi Callicoatte, Current Media; and Others: Dr. Sandra Woodley, UT Permian Basin; Deepanshu Kumar, Senior Project Advisor (DAC) Oxy; and other interested citizens A quorum being present, Mr. Crow called the meeting to order, and the following proceedings were held: Dr. Kirk gave the invocation. The Pledge of Allegiance and Texas Pledge were recited. Minutes of April 11, 2024, Motion was made by Mr. Boutin and seconded by Dr. Kirk to approve the minutes as amended. The motion was approved by unanimous vote. Contractors’ reports: Economic Development Department, Current Media Partners, Black Chamber of Commerce, UTPB-America’s SBDC, MOTRAN, and City administrative support: financials. Mr. Manskey reviewed the economic development activity report. Project King Maker will plan a site visit to Odessa within the next 90 days. Project Repo/Rental King, LLC, Project Pearl/Orrex Plastics Company, and Sparks Sales and Service, LLC are items on the agenda. The EDAs for those projects will be considered at the June ODC Board meeting. Project Repo is a new project. Project Pearl and Sparks Sales and Service are expansion projects. Project Lonestar Lithium, the electric battery project, will be in town next week for a site visit. Mr. Manskey attended the Clean Power Trade Show in Minneapolis and met with a company that does wind and solar projects, they work with companies to provide electricity for them. This company has worked with an electric vehicle battery manufacturer in the past and will be in the zoom meeting with the Project Lonestar Lithium representatives next week. Project Molecule, the ancillary project of 1PointFive received an abatement from Odessa College. Things are looking very good for the ODC Minutes May 16, 2024 Page 2 approximately 85-million-dollar project coming to Ector County. ODC Board members and Compliance members toured Orrex Plastics and REXtac. Mr. Deepanshu Kumar, Senior Project Advisor, gave a presentation and update on the 1PointFive Stratos Direct Air Capture (DAC) project, the Oxy sequestration project. Oxy has more than fifty years of experience in carbon management. They have been processing, transporting, injecting, and storing CO2 in the Permian Basin for over fifty years. They are a leader in carbon management and sequestration. Oxy created a subsidiary called 1PointFive with the goal of advancing projects in the field of carbon management. The project is located twenty miles southwest of Odessa in a remote location. He discussed the extraction of CO2, injection, and raw material use. Construction began in 4th Quarter 2022. They are on track to commence official operations in May 2025. The contractor for this project, Worley, currently has approximately 1,000 employees working on the project. Worley is truly dedicated and has a robust apprenticeship program. They go through onsite training; 75 industry certifications and get skills they can use in future projects. Worley has 225 apprentices and they have completed more than 185,000 hours of training combined. Worley is working with Odessa College who has ninety-five candidates for their program. Once construction is completed, 1PointFive will take over the project. 140 FTE’s will be required for the daily operation and maintenance of this plant. The sequestration project is located 2 miles southwest of Stratos. They should start drilling injection wells sometime in September. They have gathered seismic data and air born surveys of the area. Oxy to date has already drilled 7 wells. They are currently drilling monitoring wells. There will be a robust monitoring program. Mrs. Callicoatte reported the Target Industry Analysis is complete. It has been sent to the advertising committee and the economic development team. It will be circulated to the ODC board next week. Digital campaigns have gone back up to the normal levels in May. Regarding the new campaign that was recently shared with the board, Current Media is working on new ads for manufacturing and renewable manufacturing campaigns. Golden Shovel has started the publication ads. All magazine ads have been placed. They are starting to get editorial space, one in Business Expansion in April and two are coming up in Trade and Industry and Business Facilities. Mr. Russell requests that as we get the editorial placements, he would like them in the board packet. Graphics on social media are being updated. A geofence was put around the Clean Power Trade Show Mr. Manskey attended, followed by a short campaign. The workforce resource page on the website is being revamped. Looking at doing more locally to educate the public about ODC. The Target Industry Survey was 100 pages. They are doing a deep dive into the information and taking it in steps. Mr. Beauchamp presented the quarterly MOTRAN update. Beginning today, May 16th, the I-20 Frontage Roads between JBS in Odessa and FM 1788 in Midland will be one- way and construction will begin on the additional lane in both directions on I-20. An additional lane will be added on the interior to reduce impacts of construction and to conform to existing right-of-way. Currently updating some of the transportation materials to reflect the final designation for I-27 and I-14. Recently EPA was in our area. Part of that visit involved discussions of a proposed discretionary designation of the Permian Basin area as a non-attainment area under the Clean Air Act for purpose of Ozone. The concern from a MOTRAN perspective is the increased costs associated with the type of designation. Additional annual costs to drivers: $11.7 million and additional roadway construction cost of the next decade: $573.6 to $716.8 million. Ms. Banda reviewed the ODC February Financial Report. Total assets $86,436,800. Total Short-Term Commitments $4,513,164. Total Long-Term Commitments ODC Minutes May 16, 2024 Page 3 $26,994,944. Total Revenues for the month $1,747,567. Total Revenues YTD $7,717,497. Ms. Banda discussed the Investment Portfolio. End of the month total Local Government Investment Pools $63 338,010; total Money Market $9,703,964; CD and CDARs Investments $4,320,805. Total Investments $80,331,360. Total reserved fund balance $44,913,526. Sales tax for the month $1,314,716.25 and YTD $9,538,293.14. Tabled - Discuss and consider appointments to the ODC Compliance Committee. Mr. Crow stated some applications have been received but some are missing. He would like to allow for additional time for applications. Mr. Boutin would like to act on reappointing Chris Walker, Betsy Triplett-Hurt, Eric Augesen, Brian Green and Judy Hays and table the applications received for vacancies. Motion was made by Mr. Boutin to approve reappointments of Chris Walker, Betsy Triplett-Hurt, Eric Augesen, Brian Green, and Judy Hays with a second by Dr. Kirk. The motion was approved by unanimous vote. Motion was made by Mr. Boutin to table ODC Compliance Committee vacancy appointments until additional applications are received with a second by Dr. Kirk. The motion was approved by unanimous vote. Discuss and consider potential default by Nacero of Economic Development Agreement and the process to address and remedy including directing ODC Attorney to provide 30-day Notice of Default. Mr. Boutin stated that he has reviewed the Economic Development Agreement, and it does state 30-day notice to terminate. Motion was made by Mr. Boutin to terminate the Economic Development Agreement and request the $2 million back with a second by Dr. Kirk. The motion was approved by unanimous vote. Resolution No. ODC-2024R-09 - Remove from the table to discuss and consider Resolution authorizing ODC to enter into an Economic Agreement with UTPB as part of a collaboration with Permian Strategic Partners and the Midland Development Corporation to develop a SAS analytics workforce model that will support plans to close the workforce gaps and to provide support for economic development. Motion was made by Mr. Russell and seconded by Mr. Harry to remove the item from the table. The motion was approved by unanimous vote. Dr. Woodley reviewed the objective of the model to develop an analytic platform that will allow UTPB to strategically plan and implement initiatives to close the workforce gaps. The ability to connect data in the entire pipeline of workforce and provide evidence based executive dashboards to all the decision makers who must line up their strategic plans. We want to be able to see what the workforce gaps are going to be over the next five to ten years and keep this data updated every year, so it is understood how many of what type of jobs are needed. Dr. Woodley stated from UTPB’s analysis, 190,000 jobs will be needed in the Permian Basin over the next twenty years and 38,000 of those jobs will require a bachelor’s degree. Year one sophisticated economic data to look at the workforce gaps. Year two will connect workforce data to look at what’s in the pipeline to fill gaps. Then they want to look at K-12 institutions as well. Look at Kindergarten through when students graduate and go into the workforce. How many students are there, what are they interested in, how do we connect that with career outcomes data. The request before ODC is a two-year project that would allow for an investment of $398,279 in year one and $420,781 in year two. The request is to be one of three ODC Minutes May 16, 2024 Page 4 partners to fund this project. This project is shared between Midland Development Corporation (if approved in June), Permian Strategic Partnership and ODC. This model will help identify clearly what the workforce gaps are. Mr. Boutin stated a disconnect in Section 4. of the UTPB Covenants it talks about expenditures by UTPB in a minimum amount number of dollars, it should say maximum amount, it should match ODC’s maximum amount as stated in the EDA. Mr. Robinson voiced his concerns about funding this project. Motion was made by Mr. Boutin to approve with the change of “minimum” to “maximum” and a second by Dr. Kirk. The motion was approved by unanimous vote. Tabled – Discuss and Consider Resolution authorizing ODC to enter into an Economic Development Agreement with Rental King LLC for the development of a new location in Odessa. Mr. Crow stated the resolution has not been completed by the legal team. Motion was made by Mr. Russell and seconded by Ms. Hollmann to table the item. The motion was approved by unanimous vote. Tabled – Discuss and Consider Resolution authorizing ODC to enter into an Economic Development Agreement with Orrex Plastics Company LLC to expand their Odessa facility. Mr. Crow stated the resolution has not been completed. Motion was made by Mr. Russell and seconded by Ms. Hollmann to table the item. The motion was approved by unanimous vote. Tabled – Discuss and Consider Resolution authorizing ODC to enter into an Economic Development Agreement with Sparks Sales & Service, LLC for expansion of existing facility. Mr. Crow stated the resolution has not been completed. Motion was made by Dr. Kirk and seconded by Mr. Harry to table the item. The motion was approved by unanimous vote. ODC Committee and Officer reports: Partnership, Tax Incentive, Advertising, DOI Grants Design Review Board, and Compliance. Mr. Boutin stated the Tax Incentive Committee met but did not have a quorum. The Tax Incentive Committee has lost its Chair and Vice Chair. Michael Forrest has agreed to be Chair and Mr. Boutin has agreed to be Vice Chair. There was a proposal for a tax abatement, but no action was taken. The committee via email will ask to not recommend to the city. Mr. Boutin, Mr. Forrest, and city staff will look at the By Laws and guidelines and make sure they are still valid. They will then return to the committee to discuss and approve and recommend to the City Council. Mr. Russell stated the advertising committee will be looking at the Target Industry Survey with Mrs. Callicoatte and getting it ready to present to ODC Board at the next meeting. Mr. Crow stated the Compliance Committee met on the projects tabled at this meeting. The ODC Board and Compliance Committee were invited to tour Orrex. Closed Session the board may recess into Executive Session in compliance with section 551.001 et. Seq. Texas Government Code. No action. Citizens comments on non-agenda items. Mayor Joven spoke to the ODC board regarding Odessa’s aging infrastructure. Mayor Joven requested help in addressing the ODC Minutes May 16, 2024 Page 5 city’s water and sewage system. He tasks ODC with researching a legal way to help. The city has 3,500 valves, 500 miles of sewage pipe and 700 miles of water pipes that are beyond their useful life. This is the second time in two years the city has had to shut off water for the entire city. 28 million gallons of water were lost due to the recent water line break. We are dealing with a system that is operating completely beyond its life expectancy. Mayor Joven stated we cannot afford a catastrophic event. Upcoming dates for future ODC Board meetings. The next ODC Board meeting is scheduled tentatively for June 13, 2024 2:00 p.m. Mr. Crow discussed having the meeting at a different time than 2:00 p.m. After a brief discussion the next meeting is tentatively scheduled for 8:00 a.m. on June 13, 2024. Motion was made by Ms. Hollmann and seconded by Mr. Harry to adjourn the meeting. The motion was approved by unanimous vote. The meeting was adjourned at 4:40 p.m. PREPARED BY: APPROVED: Kathi Vaughn Kris Crow Economic Development Specialist President ATTEST: Norma Aguilar-Grimaldo, TRMC, CMC City Secretary