Sugar Land Development Corporation

Agenda Request

Agenda Of:

October 03, 2006

Agenda Request No:

II A

Initiated By:

kathy Munoz

Executive Secretary

Responsible Department:

City Secretary

Presented By:

Glenda Gundermann,

City Secretary

Department Head:

Glenda Gundermann,

City Secretary

 

 

Additional Department. Head (s):

N/A

Subject / Proceeding:

Minutes Sugar Land Development Corporation Meeting September 5, 2006

Approve Minutes

Exhibits:

Minutes September 5, 2006

Clearances

Approval

Legal:

N/A

Executive Director:

Joseph Esch, Business & Intergovernmental Relations*

Recommended Action

 

Approve minutes Sugar Land Development Corporation meeting September 5, 2006.

 

Exhibits

 

STATE OF TEXAS

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COUNTY OF FORT BEND

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CITY OF SUGAR LAND

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CITY OF SUGAR LAND

Sugar Land Development Corporation MEETING

September 5, 2006

 

REGULAR MEETING

 

The Sugar Land Development Corporation convened in regular meeting open to the public, in the Cane Room 161 of Sugar Land City Hall on Tuesday, September 5, 2006 at 4:10 o'clock P.M. and the roll was called of the members; to wit:

 

Dennis Parmer, President

Daniel Wong, Vice-President

Michael Schiff, Secretary/Treasurer

Cyril Hosley, Director

David Wallace, Director

Thomas Abraham, Director

Russell Jones, Director

 

QUORUM PRESENT

 

All of said members were present with the exception of Director Wallace who arrived at 4:48 p.m.

 

Also present were:

Allen Bogard, City Manager

Regina Morales, Economic Development Director

Matthew Fielder, Economic Development Manager

Ms. Jennifer Brown, Budget Manager

Donna Vaughan, Records Manager and

A Number of staff and visitors

 

CONVENE MEETING

 

President Parmer convened the session, open to the public, to order at 4:10 o’clock P.M.

 

minutes august 1, 2006

 

President Parmer introduced the minutes of the Sugar Land Development Corporation meeting held on August 01, 2006.

 

Following a full and complete discussion, Director Schiff, seconded by Director Jones, made a motion to approve the minutes of the Sugar Land Development Corporation August 01, 2006meeting.  The motion carried unanimously.

 

FINANCIALS

 

FINANCIAL STATEMENTS ENDING JULY 31, 2006

 

President Parmer introduced discussion on the Sugar Land Development Corporation Financial Statements for the period ending July 31, 2006.

 

Ms. Jennifer Brown, Budget Manager, presented an overview of financial operations through July 2006; total revenues through July $16,643 million, representing 101% of current budget.  Monthly sales tax for the Corporation totaled $356,209, an increase over budget projections of 20.8% and 36.7% higher than July 2005. Year-to-date sales collections total $3,525,347 totaling 12.8% higher than budget and 9.9% higher than fiscal 2004/2005 collections.  Excluding one-time payments, year-to-date collections are 9.5% higher than budget and 6.7% higher than last year.  Interest income of $338,126 is 134.7% higher than the annual budget. 

 

Expenditures through July 2006 total $14,974,433 inclusive of 11.3 million reimbursement to the developer for Town Square infrastructure, $1 million in debt service payments, $1.3 million in economic development incentives and the first of three annual payments to TxDot of $570,061 for U. S. 59 Phase II. 

 

Cash and investments of $8.8 million are allocated 50% TexPool, 6% in Cash, 35% in Agencies, and 9% in Treasuries.  Total weighted average yield to maturity is 5.06%, lower than benchmark 65-day agency yield of 5.12%.  The July portfolio yield increased 16 basis points, while the benchmark yield decreased by 13 basis points.  The TexPool average yield for June is 5.23% 

 

Budgeted available funding at July 31st is $387,749, net of fund balance policy of $378,968 equals 10% of budgeted sales tax collections.

 

In economic development, July 2006 single family permits were issued with an average value of $224,903.00; ninety six permits in July and even greater in August.

 

Year to date, 40 commercial permits were issued with a value of $102.1 million, including 6 non taxable permits as compared to 52 permits issued July 2005 with only a 6 million difference in valuation.  The unemployment rate for June was 4.3%, an increase of 0.5% from May’s rate of 3.7%.  The U.S. Consumer Price Index is 4.1% for July; a decrease from 0.2% from the June rate of 4.3%.  February and March were considered anomalies; and those two months should be excluded.

 

Lenders foreclosed on 2 residential properties within the corporate limits of Sugar Land in July with an average home value of $155,230.00.  For fiscal year 2005/2006, 46 homes have been foreclosed, with an average cost of $212,117.00.  

 

agreement

 

BECHTEL EQUIPMENT OPERATIONS, INCORPORATED

 

President Parmer introduced consideration on a Performance Agreement in the amount of $200,000.00 by and between the City of Sugar Land and Bechtel Equipment Operations, Incorporated for relocation and development of a corporate headquarters facility.

 

Ms. Regina Morales, Economic Development Director Bechtel Equipment Operations, Incorporated proposes to relocate their regional headquarters to Sugar Business Park on 4.2 acres and construct a 41, 600 square foot facility.  The move will relocate 25 jobs with an average salary of $55,000.00 and create 15 new positions with an average salary of $65,000.00.   The tax abatement allows for $200,000.00 in direct incentives with a payment of $100,000.00 when Bechtel is fully operational in May 1, 2007 with real and personal property in place and Texas Workforce Commission confirming salaries of employees.  Sugar Land Regional Airport will benefit from additional fuel sales by attracting Bechtel’s aircraft fleet and proposes to offer a jet fuel credit for a one-year term that requires 20 landings with a $2,500.00 fuel credit for each visit up to $50,000.00.  Bechtel will be eligible for an additional $50,000.00, with documentation and a written statement of compliance received within one calendar year.

 

Directors discussed the economic incentives for jet fuel.  Mr. Bogard stated that the City hoped to solicit other divisions of Bechtel to the city with the incentives. Staff has reviewed airplane types used by Bechtel, and believe fuel costs incentives will be recaptured through the use of other airport amenities.  The Board discussed tracking measures that were in place for the various incentives that are approved through different projects. Regina Morales stated there were spreadsheets tracking the incentives and trigger points in calendars for specific reports used to verify and confirm compliance. 

 

Following a full and complete discussion, Director Hosley, seconded by Director Abraham, made a motion to approve a Performance Agreement in the amount of $200,000.00 by and between the City of Sugar Land and Bechtel Equipment Operations, Incorporated for relocation and development of a corporate headquarters facility.  The motion carried unanimously.

 

CREATION SLDC DIRECT INCENTIVE POLICY

 

President Parmer introduced discussion on creation of Sugar Land Development Corporation direct incentive policy.

 

Mr. Joseph Esch, Executive Director Business and Intergovernmental Relations, discussed the need to formalize guidelines to be used to evaluate economic incentive projects; informal guidelines have been in place for the past two years.   With the increase in requests for funds, formal guidelines will promote consistency of program funding and provide project evaluation and decision making tools for City economic development efforts in the future.

 

The City has typically sought projects with low risk from companies with a credit rating of “A” or equivalent; excluding start up companies.  The maximum payback period is 10 years and the agreement is generally tied to the term of the lease.  The gap principle is usually applied which looks for the gap in what the company can afford and what is required for the project.   Threshold qualifications are: 100 new jobs with starting salaries of $55,000 and 15 million in total capital investment.  The decision making guidelines allow us to reject unworthy projects and provide flexibility for unique circumstances.  Projects are considered on many factors of revenue, cost, inflation rates, tax rate, and discount rates for a total package.

 

City Staff AND CORPORATE MEMBER REPORTS

 

CITY STAFF REPORT

 

Mr. Joseph Esch, Executive Director Business and Intergovernmental Relations reported on the proposed October 2006 meeting agenda to include the direct incentive policy guidelines, the annual EDC contract and annual election of officers; and reviewed the September 21, 2006 event at the Marriott to recognize the accomplishments Sugar Land and the City leaders.

 

CORPORATE MEMBER REPORTS

 

There were no reports.

 

EXECUTIVE SESSION

 

President Parmer adjourned the regular meeting time 5:10 P.M. to go into Closed Executive Session as authorized by Chapter 551, Texas Government Code:

 

Economic Development: Section 551.087, Texas Government Code (Deliberations Regarding Economic Development Negotiations.)

 

For the purpose of deliberation regarding the offer of incentives to business prospects that the City Council seeks to have locate in the City and with which the City is conducting economic development negotiations. 

 

ADJOURN

 

There, being no further business to come before the Corporation, Director Parmer moved that the meeting adjourn.  The motion carried unanimously and the meeting adjourned, time at 5:26 o'clock P.M.

 

                                                           

Dennis Parmer, President

 

                                                           

Michael Schiff, Secretary/Treasurer

 

(SEAL)