6-22-2017 Minutes SEDC Reg MtgSC1H[1E1Rt F7Z
ECONOMIC DEVELOPMENT CORPORATION
MINUTES
CITY OF SCHERTZ
ECONOMIC DEVELOPMENT CORPORATION
BOARD OF DIRECTORS
REGULAR MONTHLY MEETING
THURSDAY, JUNE 22, 2017
The City of Schertz Economic Development Corporation (SEDC) Board of Directors met for a Regular
Monthly Meeting on Thursday, June 22, 2017 at 6:00 p.m. in the City Council Chambers, conference room,
1400 Schertz Parkway, Schertz, Texas.
CALL TO ORDER
1. Roll call and recognition of visitors.
President Brown called the meeting to order at 6:02 p.m. and welcomed everyone in attendance.
Board of Directors:
Tim Brown — President
Gary Howell — Vice President
Paul Macaluso — Treasurer /Secretary
Katie Chain
Victoria Readnout
Mark Tew — Arrived at 7:27pm
Directors Absent:
Roy Richard
Staff:
Kyle Kinateder
Patty Horan — I
Jennifer Kolbe
Drew Vincent -
James Walters -
— SEDC Executive Director
?xecutive Assistant - ED
- Business Retention Manager
ED Analyst
Director of Finance
Others present:
None
2. Oath of office for newly appointed SEDC Board Member: Victoria Readnour, and reappointments of
Board Members: Tim Brown, Roy Richard, and Mark Tew. All members were appointed by City
Council during their regular session held on 6/6/2017 to serve for two -year term commencing
5/31/2017 - 5/31/2019). (P. Horan)
Mr. Richard was not present. City Secretary authorized Ms. Horan to administer the Oath of Office to
Board Members present: Ms. Readnour and Mr. Brown. Mr. Tew was sworn in when he arrived to the
meeting at 7:27pm.
3. Introduction of new Board Member: Victoria Readnour. (T. Brown)
President Brown congratulated and officially welcomed Ms. Readnour to the Board of Directors. Ms.
Readnour has an MBA in Marketing and a BBA in Finance. Her professional experience focused
primarily in the fields of education, medical, high tech industry growth and development in the
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fields of networking, data and voice communications. Ms. Readnour thanked the Board for the
opportunity to get involved and serve the community.
4. Consider /Discuss /Act on election of corporation officers for term of office FY 2017 -2019 and other
matters connected therewith. (T. Brown)
The Board held an election for the corporation officers' positions of: President, Vice President, and
Treasurer /Secretary for the term of May 31, 2017 to May 31, 2019 in accordance with the Bylaws.
A single motion to re -elect the current officers of the Board: Mr. Brown - President, Mr. Howell-
Vice President, and Mr. Macaluso- Treasurer /Secretary for the term 2017 -2019 was made by Ms. Chain.
Seconded by Ms. Readnour. All nominated members accepted their positions and the motion passed.
Mr. Richard and Mr. Tew were not present to vote.
5. Public comment.
This time is set aside for any person who wishes to address the Board Each person should fill out the Citi .Zen's to be
Heard registry form pazor to the meeting. Presentations should be limited to no more than 3 minutes. The presiding ofcer,
during the Public Conamentporiion of the agenda, will call on those persons who have signed asp to speak in the order they
have registered
No one spoke during public comment.
ITEMS FOR INDIVIDUAL CONSIDERATION
6. Consider /Discuss /Act on approval of the Minutes for the Board of Directors Regular Monthly Meeting
held on Thursday, May 25, 2017 (P. Horan)
A motion to approve the Minutes for the Board of Directors Regular Monthly Meeting held on
Thursday, May 25, 2017 was made by Mr. Macaluso. Seconded by Mr. Howell. Motion passed
unanimously without Ms. Readnour's vote due to not being present at that meeting.
7. Review of the SEDC Monthly Financial Report for the month of May 2017. a. Walters)
Mr. Walters provided an overview of the revenue and expense report (unaudited) as of May 31". Major
highlights included a total cash increase of $13,345,380.72 and a total sales tax revenue increase of 8.7 %.
Ms. Readnour requested clarification on the increase of the 8.7% in sales tax revenue. Mr. Walters
explained that the State Comptroller's Office, after conducting an audit, allocated some adjustments to
our jurisdiction. Numerous factors involved in that process indicated a favorable reassessment of sales
taxes for our city.
8. Consider /Discuss /Act on the Agreement For Provisions of Professional Services Between The City of
Schertz and The City of Schertz Economic Development Corporation and recommend approval by the
City Council for the expenditures provided for in the Agreement For Provisions of Professional Services
Between The City of Schertz and The City of Schertz Economic Development Corporation in the
amount of $441,395.00 for the FY 2017 -18 fiscal year. (K. Kinateder)
Mr. Kinateder explained that the SEDC contracts with the City of Schertz for administrative operations
through the service agreement that covers items as: office space, utilities and maintenance services,
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personnel (Executive Director, Business Retention Manager, ED Analyst, Executive Assistant), and
administrative operational support: Human Resources, IT, Payroll, City Management, City Secretary,
and Finance (financial records and budget preparation). The Service Agreement formalizes the transfer
of funds by detailing the specific services that will be provided by the City to the SEDC. The total
amount of the FY 2017 -18 Service Agreement is $441,395 which is a 2.5% increase from the FY 2016-
17 Budget. The funds will be transferred from the SEDC to the City of Schertz in two equal transfers
on October 1, 2017 and April 1, 2018.
A motion to recommend approval by the City Council to authorize the Agreement For Provisions
Of Professional Services Between the City of Schertz and The City of Schertz Economic Development
Corporation for the expenditures provided for in the Agreement in the amount of $441,395.00 for the
FY 2017 -18 fiscal year was made by Mr. Macaluso. Seconded by Mr. Howell. Motion passed
unanimously.
9. Update on the Lone Star Rail District (LSRD). (K. Kinateder)
Mr. Kinateder provided a brief background and overview on the Lone Star Rail District (LSRD) project
and associated agreement. The 10 -year long participation /membership on this project was intended to
qualify for a train station in Schertz. In 2015, the SEDC Board made a finding that the project could
provide a suitable development for mass commuting facilities and the construction of infrastructure
located on or adjacent to a rail port facility which is an allowable expense under local government code
and agreed to pay for the annual membership fee. For the past two years, the LSRD decided not to
collect the membership fee payments until the study requested by the Austin and San Antonio
Metropolitan Planning Organizations is completed. A copy of the Interlocal Cooperation Act
Agreement Between the City Schertz and Lone Star Rail District was provided to the Board. The Board
asked questions related to the existing rail location and its current use. The Board requested to be
notified prior to issuing the annual membership fee.
No action was taken.
10. Consider /Discuss /Act on approval for recommendation to the City Council for the proposed SEDC
FY 2017 -18 Budget. (K. Kinateder)
Staff presented the proposed FY 2017 -18 Budget update which included the following items:
• During May 25, 2017 Board Meeting, the Board asked if the grants for Texas Plumbing Supply
and Evestra were included in the proposed FY 2017 -18 Budget. Staff reported that it was
anticipated that one or both of the proposed giants would be paid out during the 2016 -17
calendar year and that any unpaid amount would be deducted from the Small Business Grant
line item in the FY 2017 -18 Budget. Upon further review, staff proposed adding these grants
to the Development Incentive line item to preserve the entire $500,000 Small Business Grant
for future projects. If either of the two grants are awarded prior to City Council approving the
FY 2017 -18 budget the Development Incentive Fund line item will be reduced by the grant
amount. The Board supported the proposal budget increases as recommended by staff.
• Staff provided an update on the City's status regarding the purchasing of the development
software which is expected to cost $375,000. Staff reported that the City has saved $110,000
from previous years, leaving $265,000 needed to fund the purchasing of the software. At the
May 25d' Board Meeting, staff recommended funding $150,000 towards the purchase of the
software and the City would contribute the remainder. Unfortunately, due to other competing
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budget items citywide, the City may not be able to fund the remainder amount during the FY
2017 -18 Budget. Staff and the Board discussed the possibility of upping the SEDC's
contribution to ensure that the software is purchased during the upcoming budget year. The
Board asked questions about how the software would help speed up the permit review times,
the compatibility with other software and the potential impact on economic development. The
Board elected to increase the SEDC's contribution up to $265,000 if the City was able to secure
the additional funding.
Staff provided an update on the proposed Interstate 35 Corridor Study. Staff received multiple
commercial bids which ranged in price from $40K to $90K. Staff reported that a study's intent
would be to validate information that has already been identified. Staff also stated that many of
the data sources, to be used by the potential contractors to conduct the study, would be the same
ones already being used by City staff As a separate option, staff recommended working with an
engineering firm to develop a probable cost estimate for key public infrastructure that would be
needed for future commercial growth along Interstate 35. This cost for this option would range
from $25K to $50K depending on the area to be reviewed. The Board supported staffs second
option recommendation which resulted in no charges to the proposed budged.
A motion to recommend approval to the City Council for the proposed SEDC FY 2017 -18 Budget
as presented with the additional $265,000 to purchase the development software was made by Mr.
Macaluso. Seconded by Mr. Howell.
President Brown recognized Ms. Chain and Ms. Readnour who requested more information on the
SEDC's total investment amount and other related added cost for the purchasing of the development
software. Mr. Howell asked for reaffirmation on the ongoing legacy cost. Mr. Kinateder reiterated that
this is a one -time expense of up to $265,000 and the City will take on the responsibility to cover any
ongoing cost associated with the implementation of the software. He explained that the City budget is
forecast based on five (5) years of operations. Ms. Readnour stated that she'd be comfortable with
committing based on the fact that the City budgets and comes through with the additional $115,000,
steps up with moving the project forward and covers for all added cost of any ongoing upgrades and
integration of the software. In the event that the City does not move the project forward, then the SEDC
should only be out for the initial investment of $150,000.
President Brown recognized Mi. Macaluso who restated the motion as follows:
A motion to recommend approval to the City Council for the proposed SEDC FY 2017 -18 Budget
as presented with up to an increase of $265,000 towards the purchase of the development software as
presented was made by Mr. Macaluso. Seconded by Mr. Howell. Motion passed unanimously.
11. Director's Report. (K. Kinateder)
• Project updates
Mr. Kinateder referenced the Director's Report provided in the Packet and asked if there were
any questions regarding the update on Texas Plumbing Supply Co. Inc. and Evestra, Inc. No
questions were asked.
• Assistance Center Preview
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The Assistance Center was created as part of the Incentive Policy. Mr. Kinateder introduced
the SEDC Analyst, Drew Vincent, who presented on this item. Mr. Vincent explained that the
Assistance Center will be a dedicated section of the SEDC website. The Assistant Center is
intended to provide various resources to existing and new businesses looking to open operations
in Schertz. The Assistance Center provides an array of information for demographics, utilities
information, steps in the development process, listing of available properties, and listing of
business partners that can provide additional resources.
Businesses visited
Berlin Packaging — 5500 Mid- Cities Parkway, Schertz, TX
Armstrong Relocation of San Antonio — 6421 FM 3009, #200 Schertz, TX
Burch Roofing —110 FM 78 Schertz, TX
Schertz Law Center — 206 FM 78 Schertz, TX
State Farm Bill Hicks — 210 FM 78 Schertz, TX
• Events attended
Texas Internship Challenge Orientation and Training — San Antonio, TX
International Council of Shopping Centers RECon — Las Vegas, NV
Schertz Cibolo Universal City ISD Career & Technical Education Department — Samuel
Clemens and Byron P. Steele II High Schools — Schertz /Cibolo, TX
SEDC Fulfillment, Logistics, Warehouse & Distribution Roundtable — Schertz, TX
12. REQUESTS AND ANNOUNCEMENTS
The following announcements were made:
A. Announcements by City staff:
• Office closure —Independence Day —July 3-4,2017
• Schertz 4`' of July Jubilee —July 3 -4, 2017
B. Requests by Board Members to place items on a future SEDC Board Meeting agenda.
No requests were made.
President Brown recessed the open session at 7:27 p.m.
Director Mark Tew came in at 7:27 p.m. to join the remainder of the meeting. The Oath of Office was
administered at that time.
13. EXECUTIVE SESSION
A. Called in accordance with Section 551.087 of the Texas Government Code, Deliberation Regarding
Economic Development Negotiations; Closed Meeting. The governmental body is not required to
conduct an open meeting (1) to discuss or deliberate regarding commercial or financial information
that the governmental body has received from a business prospect that the governmental body
seeks to have locate, stay, or expand in or near the territory of the governmental body and with
which the governmental body is conducting economic development negotiations; or (2) to
deliberate the offer of a financial or other incentive to a business prospect.
• Project E -030
• Project E -031
• Project E -032
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Start Time: 7:27 p.m.
End Time: 8:10 p.m.
RECONVENE TO REGULAR SESSION
President Brown reconvened into regular session at 8:11 p.m.
14. Discussion and possible action to authorize the SEDC Executive Director to take the necessary and
appropriate actions to proceed with negotiations based on discussions held in Executive Session under
Agenda Item No. 13-A:
Project E -030
Project E -031
Project E -032
No action was taken as a result of executive session.
ADJOURN
President Brown adjourned the meeting at 8:12 p.m.
MINUTES PASSED AND APPROVED THIS 27 DAY OF JULY 2017
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r aut macamso — lreasurer/ secretary