Odessa Development Corporation

ODESSA DEVELOPMENT CORPORATION MINUTES CITY OF ODESSA, TEXAS June 13, 2024 A regular meeting of the Odessa Development Corporation (ODC) was held on June 13, 2024, at 2:03 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; Tyler Patton, America’s SBDC; James Beauchamp, Motran; and Others: Peggy Dean, ODC Compliance Committee Chair; Nick Fowler, Orrex Plastics; Chris Vore, Rental King, LLC; 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 May16, 2024, Motion was made by Dr. Kirk and seconded by Mr. Russell 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 Oasis is a new project and is ancillary to the 1PointFive project. Project Oasis is a $200 million capital investment with 25-30 new FTE’s. The average annual salary will be $150,000 plus. Representatives for Project Oasis were in town for a site visit on May 28th and will return in a couple of weeks to meet with taxing entities. Project Texas Clean Energy is another new project with a capital investment of $200 million dollars with 100-120 new FTE’s. There have been two site visits for this project. Project Repo / Rental King representative Chris Vore was present to discuss an EDA for a new location in Odessa. Project Pearl / Orrex Plastics representative Nick Fowler was present to discuss an EDA to expand their Odessa facility. Mr. Manskey stated there will be a workforce meeting on Monday, June 17th and he will provide additional information at the next ODC Board meeting. ODC Minutes June 13, 2024 Page 2 Mr. Patton presented the UTPB-America’s SBDC report. Mr. Patton reported 544 counseling sessions for a total of 533 counseling hours and 6 seminars with 129 attendees. The seminars were for “QuickBooks”, “How to Start Your Own Business”, “The Frost Summer Series”, “How to Do Business with UTPB” which included talking with potential vendors about projects happening on campus and encouraging local people to bid. SBDC had their first partnership with US Commercial Services locally and did an export workshop. Mr. Patton reported seven new local businesses in the past two months at $1 million in capitalization and 36 new FTE’s. Capitalization is slow primarily due to interest rates. Among the new companies were a staffing agency, a meat processing company, a nurse practitioner clinic, a clothing boutique, a dumpster rental and waste management company, a tax service, barber academy and a food truck. The SBDC is hosting the Northwest Texas Small Business Development Center Conference this week with thirty-three people in attendance. Mr. Beauchamp was present; he did not have anything new to report. Motran’s report is in the board packet. Ms. Banda reviewed the ODC March and April Financials. The Total Assets for the month of March are $87,207,088. The Fund Balance Long Term and Short-Term Commitments have been updated and the total Reserved is $26,848,174 leaving an Unreserved Balance of $53,358,723. The Revenues for the month of March were $1,400,204 with YTD $9,117,703. Ms. Banda reported there were quite a few expenditures in March because of the quarterly payments for Contracted Economic Development Services. Total Expenditures YTD in March was $1,577,131 and the Fund Balance $87,206,897. Apergy (Champion X) was paid $200,000 with $400,000 remaining on the commitment. Beginning Balance in the Government Pools is $63,338,010 and the Ending Balance is $69,478,223. Savings and Money Markets to start were $9,703,964 and Ending Balance was $9,741,878. The Municipal Bonds (CDs) have been an ongoing effort to contact First Bank & Trust. Ms. Banda did make contact on the customer service line and is waiting on a response. Ending balance for the month of March in CDs was $4,173,000. Municipal Securities beginning and ending balance $3,000,000. Mr. Russell had questions regarding the April Fund Balance Short Term Commitments, the amounts shown are not added correctly. Mr. Crow stated the same for Long Term Commitments. Ms. Banda will have an updated version of the April Balance Sheet for the ODC Board to review at the next board meeting. Total Revenues for the month of April were $1,535,921 and ended the month of April with $70,944,900 in the TexPool and Logic accounts and $9,785,139 in the Frost Money Market. There were no changes in CD Investments and Municipal Securities. Sales Tax Revenue for the month of June is $1,198,870, Fiscal YTD is $10,737,164, which is slightly above last year. Corrections for April will be presented at the July ODC Board meeting. ODC Committee and Officer reports: Partnership, Tax Incentive, Advertising, DOI Grants Design Review Board, and Compliance. Mr. Russell gave an update regarding Advertising. Mr. Russell stated that all board members should have received the Target Industry Survey from Mrs. Callicoatte that Golden Shovel conducted. Mr. Russell has requested that Mrs. Callicoatte spend some time at the next ODC Board meeting to discuss the results of the Target Industry report. A lot of work is going into advertising and an email was sent with the new look regarding current ads that are currently being distributed. ODC Minutes June 13, 2024 Page 3 Discuss and consider appointments to the ODC Compliance Committee. Mr. Crow stated there are twelve seats on the ODC Compliance Committee and of those twelve seats there are four seats that need to be filled. Motion was made by Mr. Harry to appoint Brian Bell, Zachary Bugg, Michael Forrest and Edgar Thompson with a second by Mr. Robinson. After much discussion concerning the applications received, Mr. Robinson withdrew the second to Mr. Harry’s motion. Mr. Boutin and Ms. Hollmann objected to requiring a vote on a slate of 4 out of 11 applications, as opposed to voting on each of the 4 individual appointments. Mr. Harry stated he would not withdraw his motion to appoint Brian Bell, Zachary Bugg, Michael Forrest, and Edgar Thompson. A second was made by Mr. Russell. The motion was approved by a 4-2 vote. Mr. Crow abstained. Discuss and consider Odessa Development Corporation Annual Budget Calendar for Fiscal Year 2024-2025 and ODC Request for Proposals Fiscal Year 2024-2025. Ms. Banda provided a copy of the letter for ODC Request for Proposals for economic development contractors Fiscal Year 2024-2025 and the Annual Budget Calendar Fiscal Year 2024-2025. There are no changes to the content of the letter other than the dates. Contractor’s proposals are due by July 15, 2024. Ms. Banda reviewed the Annual Budget Calendar. Finance will send a letter to contractors requesting proposals for FY2024-2025. Mr. Russell had a question regarding the UTPB Business Challenge. Ms. Hollmann stated that it should be removed and ODC’s CPA firm, Whitley Penn, may need to be added to the contractors’ proposal list. Ms. Banda will check on the timing that Whitley Penn took over replacing Weaver. On July 17th City Staff will forward proposals to ODC Board and Ms. Banda, wanted to know if the ODC Board wanted proposals sent to outside council, Jeff Moore. Mr. Jones advised the board, regarding material changes to contractor proposals, to refer to the ODC outside council, Jeff Moore. August 1, 2024 a Special ODC meeting will be held to review and discuss proposed FY 2024-2025 General Development Plan, Contractors Proposals, and proposed budget. All to be approved at the August 8, 2024 ODC Board meeting. The City Council Work Session will be August 13, 2024. The City Council will meet August 27, 2024 to approve the proposed ODC FY 2024-2025 General Development Plan, contractor proposals, Budget, and contract FORM. Motion was made by Mr. Boutin to redact the UTPB Business Challenge from the contractors list and add Whitley Penn if needed with a second by Dr. Kirk. The motion was approved by unanimous vote. Resolution No. ODC-2024R-10 - Remove from the table to 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. Motion was made by Mr. Russell and seconded by Dr. Kirk to remove the item from the table. The motion was approved by unanimous vote. Mrs. Dean, the ODC Compliance Committee Chair discussed Rental King, LLC. Chris Vore, representative for Rental King, LLC was present. Rental King, LLC is a heavy equipment rental company planning to build a new facility in Odessa. They plan to purchase land in south Odessa and will construct a new facility for $2.1 million, additionally they will add $2 million in equipment. Rental King, LLC will retain 10 employees at an annual payroll of $745,000 and create 19 new FTEs for an annual payroll of $1,154,000. Rental King, LLC qualified for up to $636,983 but the grant request is for $210,000 which covers the building and not any equipment or personal ODC Minutes June 13, 2024 Page 4 property. The ODC Compliance Committee’s recommendation to the ODC Board is to approve the $210,000. Rental King, LLC will be relocating the business from Midland to the new facility in Odessa. Motion was made by Ms. Hollmann to approve the purposed $210,000 EDA grant to Rental King, LLC and a second was made by Dr. Kirk. The motion was approved by unanimous vote. Resolution No. ODC-2024R-11 – Remove from the table to discuss and consider Resolution authorizing ODC to enter into an Economic Development Agreement with Orrex Plastics Company LLC to expand their Odessa facility. Motion was made by Mr. Russell and seconded by Mr. Harry to remove the item from the table. The motion was approved by a vote of six. Ms. Hollmann abstained. Mrs. Dean stated that currently Mr. Fowler has a $12.5 million investment in his buildings and equipment. This grant request is to build a new line. Mr. Fowler shared this line on a recent tour of REXtac and Orrex Plastics for ODC Board and Compliance Committee members. The new line will cost $2.5 million and will increase sales by approximately $2.7 million a year. He has the demand for the capacity. Orrex Plastics Company LLC qualifies for $2.2 million under the current matrix. The ask is for $2.5 million. The recommendation from the ODC Compliance Committee is to approve the grant request of $2.5 million and consider funding half of the $2.5 million which is $1,250,000 and pay after year one of the completion of the new line and pay $312,500 per year for the next 4 years. FTEs retained will be 134 employees with an annual payroll of $7,107,500 and will create 16 new FTEs for an annual payroll of $803,000. Mr. Crow stated he was extremely impressed with the facility and the operation and management of the company. However, Mr. Crow was concerned with advancing one half of the grant request up front stating that it is a dangerous precedent to set. Mrs. Dean stated the ODC Compliance Committee put a lot of emphasis on the fact that Orrex Plastics is a healthy existing business employing a lot of people and has been in business a long time. Mrs. Dean stated that this project has made the ODC Compliance Committee realize they need to re-evaluate the matrix soon. After much discussion, a motion was made by Mr. Boutin and a second by Dr. Kirk to approve a $2.1 million grant. $1,050,000 at the end of year one (50%), and the remainder will be installments of $262,500. The motion was approved by a vote of six. Ms. Hollman abstained. Discuss and consider an infrastructure grant for the replacement and/or repair of critical water infrastructure. Mr. Crow stated that he requested this item be placed on the agenda for discussion after Mayor Joven discussed the water and sewer infrastructure issues during the last ODC Board meeting. ODC attorney, Jeff Moore has stated ODC can fund infrastructure projects that are deemed necessary for our 4A Sales Tax type companies; however, we cannot fund projects that are solely for residential purposes. Mr. Boutin stated the ODC Board should be careful to not compromise their mission/position and suggested getting a list of replacement projects from the city and commit a dollar amount and understand those projects affect industrial, manufacturing and heavy commercial areas. ODC should be part of the solution but not the total solution. Mr. Crow stated the ODC board should be aware that they cannot give money directly to the city and if ODC were able to assist it would be ODC paying contractors for completion of the work. ODC cannot directly fund a municipality. City Manager, Mr. Beckmeyer stated that he has discussed this issue with ODC Attorney, Jeff Moore and ODC Minutes June 13, 2024 Page 5 the replacement of the line down 42nd Street is out. Mr. Boutin discussed raising taxes to cover basic services that the community demands. Mr. Beckmeyer stated that the city is trying to get back to focusing on basic city services. The city is getting rid of events that the city has spent hundreds of thousands of dollars on over the years. Mr. Russell stated he would like to see a way to legally free up some of the sales tax money to help with areas that are vital to taxpayers. Mr. Crow stated that if there is a way to help, ODC would want to help. Mayor Joven discussed how to get a map on the City of Odessa website, go to GIS. Mr. Beckmeyer stated infrastructure is going to be a multi-source project. CRMWD is bringing a new line into the water plant per Mr. Beckmeyer. Mayor Joven stated that the water treatment plant rebuild will be complete in 2026. Closed Session the board may recess into Executive Session in compliance with section 551.001 et. Seq. Texas Government Code in accordance with: a. Section 551.071. Consultation with Attorney b. Section 551.072. Deliberation regarding real property: the purchase, exchange, lease or value of real property, c. Section 551.087. Deliberation regarding Economic Development negotiations. Motion was made by Mr. Harry and seconded by Mr. Russell to recess into Executive Session. The motion was approved by unanimous vote. Recessed into closed session at 3:49 p.m. • Project Logical Location • Project Central Happenings Reconvene into Regular Session and take any necessary action as a result of the closed session. Motion was made by Dr. Kirk and seconded by Mr. Russell to reconvene into regular session. The motion was approved by unanimous vote. Mr. Crow stated no action was taken on Project Logical Location and no action on Project Central Happenings. Resolution No. ODC-2024-12 – Discuss and Consider Resolution authorizing ODC to enter into an MOU with Permian Basin Inland Port, LLC to assist and provide support for the development of an inland port facility in Odessa. Mr. Crow gave a summary of Logical Location. Motion was made by Ms. Hollmann and seconded by Dr. Kirk to enter into a Memorandum of Understanding (MOU) with Permian Basin Inland Port, LLC. The motion was approved by unanimous vote. Citizens comments on non-agenda items. No comment. Upcoming dates for future ODC Board meetings. Mr. Crow asked if ODC Board members had any old business to discuss before discussing the next ODC Board meeting. Mr. Harry requested from Mr. Manskey a list showing the history of all economic development projects that ODC has assisted. Mr. Manskey stated he would get that list to the board with the updated project from the current meeting. Ms. Banda stated part of the proceedings for the budget meetings were that ODC Board would review the General Development Plan and the Contract Form, a basic template prepared ODC Minutes June 13, 2024 Page 6 by City Legal. Ms. Banda asked if outside council, Mr. Moore, needs to review the template? After discussion by the board, Ms. Banda will handle the General Development Plan and Mr. Moore will handle the Contract Form. The next ODC Board meeting is scheduled tentatively for July 11, 2024 8:30 a.m. Motion was made by Dr. Kirk and seconded by Ms. Hollmann to adjourn the meeting. The motion was approved by unanimous vote. The meeting was adjourned at 4:29 p.m. PREPARED BY: APPROVED: Kathi Vaughn Kris Crow Economic Development Specialist President ATTEST: Norma Aguilar, TRMC, CMC City Secretary