Odessa Development Corporation

PUBLIC NOTICE ODESSA DEVELOPMENT CORPORATION BOARD OF DIRECTORS MEETING In accordance with the Open Meetings Act, Chapter 551 of the Government Code of Texas, notice is hereby given to all interested persons that the Odessa Development Corporation (“ODC”) will meet on Thursday, July 25, 2024 at 5:00 p.m. in the Council Chambers, fifth floor, City Hall, 411 W. 8 th St., Odessa, Texas for the following purpose: See attached agenda This Notice is being posted on the south door of City Hall and on the bulletin board of the first floor of City Hall, Odessa, Texas, on the City of Odessa’s website www.odessa- tx.gov, and on the Odessa Development Corporation’s website www.odessatex.com, this the 22nd day of July, 2024 at __________ p.m., said time being more than seventy-two hours (72) prior to the time at which the subject meeting will be convened and called to order. The meeting is available to all persons regardless of disability. Individuals with disabilities who require special assistance should contact the City Secretary's Office at 432-335-3276, or 411 West 8th Street, First Floor, Odessa, Texas, during normal business hours at least twenty-four hours (24) in advance of the meeting. Norma Aguilar, TRMC, CMC City Secretary  ODC Special Meeting Agenda July 25, 2024 5:00 p.m. Odessa City Hall, 5th Floor Council Chambers 1. Call to Order 2. Invocation and Pledge of Allegiance Any member of the public may address the ODC Board regarding any of its agenda items before or during the consideration of the item. 3. Discuss and consider Compliance Monitoring Report for UTPB (Resolution)………Tracy Jones 4. Citizens comments on non-agenda items 5. Upcoming dates for future ODC Board meetings ........................................... Dr.James Kirk A. Next ODC Board Meeting is scheduled for Thursday, August 8, 2024, at 8:30 am in the City Hall Council Chambers on 5th floor. B. Special meeting to review and discuss proposed FY 2024-2025 General Development Plan, Contractor Proposals and FY 2024-2025 Budget. Meeting is Scheduled for Thursday, August 1, 2024, at 8:30 a.m. Location to be determined. 6. Adjourn .......................................................................................................... Dr. James Kirk COURTESY RULES Thank you for your presence. The ODC Board appreciates your interest in Odessa City Government. PLEASE SILENCE OR TURN OFF ALL MOBILE DEVICES. If you wish to address the ODC Board, obtain a speaker card just inside the Council Chambers, complete the information requested on the card, and deliver to the Assistant ODC Secretary before the meeting or as soon as you can. Speakers will be heard as the individual item(s) in which they have registered an interest come before the ODC Board. Remarks will be limited to three (3) minutes per speaker. PLEASE GIVE YOUR NAME FOR THE RECORD. Delay or interruption of the proceedings will not be tolerated.  RESOLUTION NO. ODC-2024R-___ A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ODESSA DEVELOPMENT CORPORATION, AFFIRMING PROJECT COMPLIANCE FOR THE UNIVERSITY OF TEXAS PERMIAN BASIN; APPROVING THE THIRD AND FINAL ANNUAL INCENTIVE PAYMENT; APPROVING THE FINDINGS OF FACT; AUTHORIZING EXECUTION OF NECESSARY DOCUMENTS; AND DECLARING AN EFFECTIVE DATE WHEREAS, the University of Texas Permian Basin (“UTPB”) and the Odessa Development Corporation (“ODC”) entered into a Third Training Facilities Grant Agreement (the “Agreement”) on December 9, 2020, in the amount of $2,100,000; and WHEREAS, ODC administers an annual reporting program through their Economic Development Contractor (“EDC”) and a Compliance Consulting Services Provider (“Consultant”) for all existing multi-year economic development agreements to determine the company’s compliance with the terms and conditions of the agreement; and WHEREAS, the Consultant has completed its review of the required compliance documentation for the Agreement for the 2022-2023 reporting period; and WHEREAS, the ODC Compliance Committee has reviewed the compliance monitoring report provided by the Consultant and finds UTPB to be in compliance with regard to Summer 2023 enrollment but out of compliance with regard Fall 2022 and Spring 2023 enrollment; however, the total student enrollment was exceeded; and WHEREAS, UTPB far exceeded the capital investment requirement for the project; and WHEREAS, based on UTPB’s compliance in prior years and the amount of capital investment in the project, the ODC Compliance Committee recommends the full payment of $700,000; and WHEREAS, the ODC has reviewed the Compliance Committee’s recommendation and approves the third and final annual incentive payment in the amount of $700,000, and WHEREAS, UTPB has previously been paid $1,400,000 under the Agreement; and WHEREAS, the payment approved in this Resolution will bring the total paid under the Agreement to $2,100,000. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE ODESSA DEVELOPMENT CORPORATION: Section 1. That the statements of fact in the Preamble are found to be true and correct and are approved as findings. Section 2. That the University of Texas Permian Basin is found to be in compliance for the 2022-2023 reporting period. Section 3. That the third and final annual incentive payment in the amount of $700,000 is hereby approved. LECH\(A) Administrative\(A-5) Organization\A-5-77 ODC\ODC Resolutions\2024\RES Payment for 3rd UTPB Training Facility Grant (3) Page 1 of 2  Section 4. That all terms and conditions of the Agreement have been satisfied, and the Agreement is hereby terminated. Section 5. That this resolution shall be effective at the time of its adoption. The foregoing resolution was approved and adopted on the 25th day of June, A.D., 2024, by the following vote: Kriston Crow ___ Melanie Hollmann ___ David Boutin ___ Tim Harry ___ Jeff Russell ___ James W. Kirk ___ Larry G. Robinson ___ Approved the 25th day of June, A.D., 2024. Kriston Crow, President ATTEST: Norma Aguilar, City Secretary as Secretary for ODC Board APPROVED AS TO FORM: Daniel C. Jones, City Attorney as Attorney for ODC Board LECH\(A) Administrative\(A-5) Organization\A-5-77 ODC\ODC Resolutions\2024\RES Payment for 3rd UTPB Training Facility Grant (3) Page 2 of 2  ODESSA DEVELOPMENT CORPORATION COMPLIANCE MONITORING REPORT: ECONOMIC DEVELOPMENT AGREEMENT WITH THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN Period: September 1, 2022 to August 31, 2023 DRAFT 07-18-24  Odessa Development Corporation COMPLIANCE MONITORING REPORT: ECONOMIC DEVELOPMENT AGREEMENT WITH THE UNIVERSITY OF TEXAS OF THE PERMIAN BASIN Table of Contents Page Compliance Monitoring Report 1 Nature of the Entity 2 Scope and Objectives 2 Procedures Performed and Results 2 Exhibit A: The University of Texas of The Permian Basin 2 DRAFT 07-18-24  Compliance Monitoring Report To the Board of Directors Odessa Development Corporation This report represents the results of our monitoring procedures, as determined by Odessa Development Corporation (“Corporation” or “ODC”) management, relating to the Economic Development Agreement with The University of Texas of The Permian Basin (Grantee) for the compliance period of September 1, 2022, through August 31, 2023. The objective of our compliance monitoring procedures was to verify whether the Grantee was complying with the requirements of their Economic Development Agreement, as identified and communicated to us by the Corporation. To accomplish this objective, we held discussions with Corporation management, reviewed the Grantee’s Economic Development Agreement and reviewed pertinent supporting documentation, as provided by the Corporation. Our procedures were performed based on guidelines provided by Corporation management and in accordance with Statement on Standards for Consulting Services issued by the American Institute of Certified Public Accountants Management Consulting Services Executive Committee. We were not engaged to, and did not perform an audit, in which the objective would be the expression of an opinion on the financial statements of the Odessa Development Corporation. Accordingly, we do not express such an opinion. This report is intended solely for the use of Corporation management and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes. The following report summarizes the procedures performed, observations and findings. Odessa, Texas July 18, 2024 DRAFT 07-18-24 1  Odessa Development Corporation Compliance Monitoring Report: Economic Development Agreement with The University of Texas of The Permian Basin Period: September 1, 2022 to August 31, 2023 Nature of the Entity The Odessa Development Corporation (“Corporation” or “ODC”) is a quasi‐governmental organization created on December 1, 1997 as a public instrumentality and non‐profit industrial development corporation under provisions of the Development Corporation Act of 1979 of the state of Texas. The Corporation is funded by a one‐quarter (1/4) percent sales tax collected within the City of Odessa, Texas (City). The Corporation is governed by a seven‐member Board of Directors appointed by the Odessa City Council (“City Council”), the Corporation’s annual approved operating budget, and projects undertaken by the Corporation that are subject to approval by the City Council. Because of the oversight structure, the Corporation is considered to be a component of the City of Odessa, Texas. As a result of this structure and in accordance with Governmental Accounting Standards Board (GASB), the Corporation’s financial affairs are included in the City’s annual comprehensive financial report as a discretely‐presented entity. Additionally, based on the nature of the Corporation’s major revenue sources, it is included in the City’s governmental funds presentation. The Corporation exists for the primary and public purpose of developing, stabilizing, diversifying and expanding the Odessa, Texas economy through retention, expansion and recruitment of employment opportunities in order to benefit citizens of Odessa and the surrounding area. Its purpose also includes completing any and all projects authorized by Section 504 of the Local Government Code. Scope and Objective The scope of our engagement was to perform compliance monitoring procedures related to The University of Texas of The Permian Basin (Grantee) Economic Development Agreement (EDA) with the Corporation. Our procedures included reviewing the supporting documentation for the compliance period of September 1, 2022 through August 31, 2023, to address each compliance requirement. The objective of our engagement was to ensure that adequate documentation existed for the test period to support compliance with the requirements of the Grantee’s EDA, as deemed appropriate by management of the Corporation. Procedures Performed and Results We performed compliance monitoring procedures for The University of Texas of The Permian Basin compliance period of September 1, 2022 through August 31, 2023. See Exhibit A for the procedures performed and results of procedures. A summary of results is presented below.  The Grantee met the insurance coverage requirement as required by the insurance clause of the EDA.  The Grantee met the required $700,000 annual expenditures related to their Workforce Initiative (Workforce Training and Advanced Manufacturing Center and the Innovation Center/Incubator/Makerspace) for year one (1) and year three (3).  The Grantee met the total student completion requirement of 300 students for the Summer 2023 semester as there were 380 students calculated.  The Grantee did not meet the total student completion requirement of 1,100 students for Fall 2022 and 1,000 students for Spring 2023 semesters as there were 1,090 and 971, respectively, students calculated. DRAFT 07-18-24 2  Odessa Development Corporation Compliance Monitoring Report: Economic Development Agreement with The University of Texas of The Permian Basin Period: September 1, 2022 to August 31, 2023 Exhibit A The University of Texas of The Permian Basin (Grantee) Detailed Procedures and Results 1. Procedures Performed: We reviewed the Certificate of Liability Insurance provided by the Grantee to confirm that insurance coverage was obtained active for the property. The certificate is intended to protect the facility from “all risks” of direct physical loss or damage as required by the insurance clause of the EDA. Results: No findings were identified. 2. Procedures Performed: We obtained and reviewed a listing of Grantee employees for the period of September 1, 2022 through August 31, 2023, and reconciled salaries support and performed the following data validation procedures where we recalculated the annual compensation for 8 employees. Results: Based on the procedures performed, the Grantee met the $700,000 minimum annual requirement of expenditures related to their Workforce Initiative (Workforce Training and Advanced Manufacturing Center and the Innovation Center/Incubator/Makerspace) for the final year of their three (3) year agreement. No differences were identified in the calculated amounts from those presented by the Grantee. 3. Procedures Performed: We obtained the student enrollment certification by the Grant Accountant II of The University of Texas of The Permian Basin and verified whether the Grantee met the student completion requirement for Fall 2022 (1,100 students), Spring 2023 (1,000 students), and Summer 2023 (300 students) semesters. Results: Based on the procedures performed, the Grantee met the total student completion requirement of 300 students with a passing grade for Summer 2023 but did not meet the requirement of 1,100 students for Fall 2022 and 1,000 students for Spring 2023. Detail of student completions with a passing grade are presented below: Required Total Semester Total Students Students Fall 2022 1,090 1,100 Spring 2023 971 1,000 Summer 2023 380 300 DRAFT 07-18-24 3  Odessa Development Corporation Compliance Monitoring Report: Economic Development Agreement with The University of Texas of The Permian Basin Period: September 1, 2022 to August 31, 2023 4. Procedures Performed: The Corporation requested for Whitley Penn to conduct a compliance review beyond our initial scope on the expenditures related to the Workforce Initiative (Workforce Training and Advanced Manufacturing Center and the Innovation Center/Incubator/Makerspace) for the first year of their three (3) year agreement only for construction and equipment purchases and/or expenditures. We obtained and reviewed the accounts payable ledger for all equipment and construction expenditures for the period of September 1, 2020 through August 31, 2021, and reconciled Grantee’s accounts payable ledger to supporting invoice and payment voucher documentation related to the expenditures for equipment and construction. Results: Based on the procedures performed, the Grantee met the $700,000 minimum annual requirement of expenditures related to their Workforce Initiative (Workforce Training and Advanced Manufacturing Center and the Innovation Center/Incubator/Makerspace) for the first year of their three (3) year agreement as there were $364,272 total equipment and construction expenditures. The remaining $335,728 annual requirement was met through payroll expenses (salaries support) which was originally reviewed and reported in the 2020‐2021 compliance review. Additionally, as an overall review, the following capital expenditures were expended by the Grantee for the WISE project that was aimed at retooling local workforce, accelerating research, and development to promote innovation that would create more jobs and diversify the economy. The results for the economic development agreement period of September 1, 2020 through August 31, 2023 are presented below: Expenditure Period Total Amount Construction April 29, 2021 – August 31, 2023 $5,359,108 Equipment August 16, 2021 – August 31, 2023 $893,629 DRAFT 07-18-24 4