CITY OF SANTA FE REGULAR MEETING JUNE 25, 2024 7:00 P.M. COUNCIL CHAMBERS 12002 HWY.6, SANTA FE, TEXAS  ECONOMIC DEVELOPMENT CORPORATION  MINUTES  The meeting was called to order at 7:00 p.m. by President Bob Wylie.  Roll Call:  Present:  President Bob Wylie Director Johnny Helpenstill Director Pam Schwertner Director Ryan McCamy Director Gary Summerville Vice-President Matt Crable secretary/rreasurer Terri O'Connell  Absent:  The Invocation was given by Director Helpenstill, andi the pledge to the U.S. Flag and tot the Texas Flag was led by  President Wylie. Citizens' Comments: There were no comments from citizens. Reports  a. Approval of Board Minutes from the Regular Meeting of May 28, 2024  Motion by Director Helpenstill to approve the Board minutes from the regular meeting on May 28, 2024, seconded  by Director Summerville. The motion passed unanimously.  b. Current Budget Update & Financial Statements, period ending May 2024  Economic Development Corporation (EDC) )Executive Director Rudy Zepeda agave and overview oft the current budget  andi financial statements as of May 31, 2024: Current Revenue: $406,466 Current Expenses: $270,017 Ending Fund Balance: $3,132,500  Current Net Revenue over Expenses approximately: $136,449  C. Sales Tax Report May 2024 (Collected in April, Received in June)  Executive Director Rudy Zepeda gave an overview oft the sales tax report for May 2024 sales:  May total revenue tot the Economic Development Corporation (EDC) was $82,635, which represents a5 5.9%  increase over May 2023.  Year-to-date revenue is up approximately 5.9% compared to 2023.    Minutes (cont) 06/25/2024 Page2of8  d. Economic Development Update Services Department for May 2024:  Economic Development Corporation (EDC) Coordinator Josh Dearing presented an overview of the Community  Total permits issued -6 617 (compared to 340 permits issued in May 2023) Fees collected $60,414 (compared to $26,092 collected in May 2023) Completed inspections - 347 (compared to 258 inspections in May 2023) Mr. Dearing also provided updates for ongoing commercial projects, including:  New residential construction permits issued- 120 (compared to 21 permits issuedi in May 2023)  Hubcap Grill - Issued permit for an approximately 1,200 square foot covered awning Whataburger- - Interior trades have begun Starbucks- - Awaiting construction pending issuance ofal TxDOT permit RC Systems - Construction continues on the property  Director Pam Schwertner asked the Board of Directors (Board) if the Economic Development Corporation (EDC) could begin sending out letters to new businesses welcoming them tot the community. The letter should include the  new EDC logo andt the Board members' names.  Old Business  a. Discussion with possible action on approval of the Business Expansion Attraction and Retention Economic Development Corporation (EDC) Coordinator Josh Dearing presented copies of the revised guidelines and application for the Business Expansion Attraction and Retention (BEAR) program, and a spreadsheet detailing requested changes from the Board of Directors (Board) that were made by the Board during their meeting on May 28, 2024. The desire ist for the BEAR program tol be effective fort fiscal year 2025, which begins on October01,2 2024 andi is expected to have an initial budget of approximately $115,000. Discussion andi feedback from the Board is as  (BEAR) program fori further consideration by the Santa Fe City Council  follows:  Director Helpenstill stated that he noticed many of the requested revisions from the last Board of Directors Director Schwertner stated that she discussed the BEAR program with the Small Business Development Center (SBDC) Director Amy Reid. Director Schwertner questioned whether the Economic Development Corporation (EDC) may consider partnering with the SBDC to promote marketing opportunities, marketing plans and business plans through the SBDC. Executive Director Rudy Zepeda stated that the EDC could direct people to the SBDC for assistance with completing thel BEAR program application. Mr. Dearing stated that he is familiar with grant programs such as the BEAR program and would be happy to assist with the application process for Santa Fe businesses. Mr. Dearing also said that he has worked with SBDC's before and would continue to utilize their expertise for small businesses in creating marketing plans and business Director Schwertner suggested that the Economic Development Corporation (EDC) sponsor a Sunrise with Santal Fel breakfast with the Santa Fe Chamberof Commerce toi introduce the program. Thel breakfast could  meeting had been included in the updated guidelines.  plans separate from the BEAR program.  be hosted at City Hall to familiarize the business community with the EDC's location.    Minutes (cont) 06/25/2024 Page3of8  Director Schwertner suggested thatt the Economic Development Corporation (EDC) purchase a retractable banner sign to market the EDC. Mr. Zepeda mentioned that the banner sign could include the new EDC Motion by Director McCamy to accept the BEAR program as presented for presentation to City Council for  logo, contact information and al bulleted list of services the EDC offers. approval, seconded by Director Summerville. The motion passed unanimously.  b. Discussion with possible action on awarding a construction contract for building office space at City Economic Development Corporation (EDC) Coordinator Josh Dearing summarized the previous steps takent to! build office space at City Hall, including the decision at the May 28, 2024 Economic Development Corporation (EDC) Board of Directors (Board) meeting to postpone the awarding of a construction contract and re-bid the project due to only receiving one (1) bid. Mr. Dearing stated that following the re-bid process, the EDC performed four (4) walkthroughs with contractors for the project and received two (2) bids for construction services. Mr. Dearing also stated that a contractor stated that they attempted to submit a bid prior to the submission deadline, but the submission was never sent from his email outbox. Discussion regarding building office space at City Hall is as  Hall  follows:  Executive Director Rudy Zepeda explained thatt the! Board of Directors (Board) had the option to review the two (2) bids that were received and accept one (1) of them, re-bid the project that could include advertising the bid around the greater Houston region, orb bid the project for al longer period oft time (e.g., bid the project Director Schwertner inquired if the Economic Development Corporation (EDC) received any verbal inquires,orifany contractors provided any feedback ast to why they did not submit al bid. Mr. Dearing stated that the EDC did not receive any verbal inquiries or receive any feedback from contractors who neglected Director Schwertner stated that she believes the longer the Board of Directors (Board) waits to award the Director Schwertner pointed out that there would be business owners coming to City Hall with the passage of the Business Expansion Attraction and Retention (BEAR) program, and it would be more appropriate to Director Helpenstill stated that K.R. Allen Construction provided a very detailed breakdown of the cost Director Helpenstill stated that he provided a courtesy walkthrough of the project with his son and believed Director Helpenstill stated that if the Economic Development Corporation (EDC) were to re-bid the project tot the greater Houston region, he believes it would receive more bids, but the bids would not come from Director Helpenstill inquired if there is a timeline for approval and construction commencement. Director Helpenstill stated that any contractor thati is awarded the contract will require time for planning, ordering of  for a month instead oft two (2) weeks).  to! bid oni the project.  contract, the more expensive the project would become.  have a dedicated office space for the Economic EDC Coordinator.  estimates for the project.  that the cost estimates received were higher than what he had anticipated.  local businesses.    Minutes (cont) 06/25/2024 Page 4of8  materials and completing current construction projects, and asked if the Santa Fe City Council has a timeline for construction commencement and completion. Mr. Zepeda explained that the City of Santal Fe does not have a specific timeline, but it would be preferable to have the project completed by thee end oft the Director Helpenstill stated that he believes that if the project were re-bid, a lower bid would not save more Director Helpenstill questioned whether the City of Santa Fe's Building Inspectors should review the scope Director Summerville stated that it was difficult to make a comparison between the two (2) bids because one of them was very itemized and detailed, and the other bid was just a lump sum figure with no details Director Summerville questioned why thel bid contained aj proposal for additional heating, ventilation and air conditioning (HVAC) units. Mr. Zepeda explained thatt thei initial scope ofv work includedi the additionall HVAC equipment because it was believed to be necessary. However, after preliminary walkthroughs, it was advised that the existing HVAC system could be re-routedi to provide service to the new offices and existing Director Summerville questioned whether the Board of Directors (Board) could meet with the contractors to review the bid and determine ifs some items wouldn't be necessary for the construction project. Mr. Zepeda said that there may be some instances where the proposed bid included information technology work that could be done by the City of Santa Fe's information technology contractor, which would provide for some cost savings. Mr. Zepeda stated that he would instruct Mr. Dearing to consult with the City of Santa Fe's Director Summerville stated that there could also be additional costs that are noti included int the bid. President Wylie summarized the discussion and stated that he believed it is the desire of the Board of Directors to award thel bid to K.R. Allen Construction with the contingency that the Economic Development Corporation (EDC) negotiate out of the contract any unnecessary work to provide for cost savings. Mr. Zepeda stated that the Board of Directors (Board) could make a motion with that contingency included to Motion by Director Helpenstill to award a construction contract to K.R. Allen Construction with the contingency that the Economic Development Corporation may potentially amend the contract to remove items included in the bid or add items noti included in the bid, seconded by Director McCamy. The motion  calendar year.  than $7,000 or $8,000. Director Schwertner agreed with this statement. of work to determine if there are any unnecessary items includedi in the bid.  included.  City Council chambers.  attorney and the contractor regarding the scope of work.  potentially amend the contract thati is awarded.  passed unanimously.  New Business  a. Discussion with possible action on funding a fire sprinkler system for SCV Valve, LLC for an undetermined amount to facilitate the expansion of the business to include a new shipping warehouse President Wylie welcomed Cary McCarra, Vice President of Operations and Glori Davis, Operations Coordinator from SCV Valve, LLC (the Company) to join the Economic Development Corporation (EDC) Board of Directors (Board) for the discussion. Mr. McCarra distributed materials to the Board for their review thati included ap packet  and future manufacturing warehouse    Minutes (cont.) 06/25/2024 Page 50f8  with historical information on the company, current employee totals, total taxes paid to the City of Santa Fe, cost estimate for the fire sprinkler system and construction of newi facilities, a rendering of the proposed facility and an estimated total ofs sales taxes paid by the company within Santa Fe; ani introduction brochure for the company that included al list of their customers, the company's product line, the company's certifications and their processes for EDC Coordinator Josh Dearing provided background to the Board regarding the conversations between the EDC and the Company. The Company approached the City of Santa Fe with plans to construct an 11,980 square foot shipping warehouse (Phase 4). Any commercial building thati is 12,000: square feet or larger requires ai fire sprinkler system. The company also plans for an additional expansion int thet future for ar manufacturing facility that wille exceed 12,000 square feet (Phase 5). Thel EDC contacted the Company toi inquire if they would prefer to construct al larger facility, andi ifs so, whether the EDC might consider funding the fire sprinkler system that would be required. Mr. McCarra addressed the Board and provided background information on SCV Valve, LLC and their continuous growth throughout the years, including two (2) previous expansions oft thei facility. Mr. McCarra then explained that the proposed expansion of Phase 4 is now proposed to be 28,500 square feet and will allow for the Company to Mr. McCarra explained that the company initially employed 15 people prior to any expansion and now employs 54 people, 36 of which work in the shop and the average wage for the shop employees is approximately $53,000 annually. Phase 4 is anticipated to add 10 employees and Phase 5 is anticipated to add 25 employees. The estimated cost for the new 28,500 square foot proposed Phase 4 expansion is approximately $1.3 million. Mr. McCarra referred to one of the handouts that the Company provided and stated that estimated expenditures within Santa Fe from 20091 to 2023 was approximately $3.37 million. Referring to the same handout, Mr. McCarra and Mrs. Davis then explainedaconseralive estimate forwhatt the Company believes theire employees spend within Santa Fe separate from the Company's expenditures. Iti is estimated that following completion of Phases 4 and 5,  manufacturing.  perform same day shipping for orders that they have processed.  the employees would spend approximately $468,000 annually.  Director Schwertner asked if SCV Valve, LLC paid sales tax on the sale and distribution oft the valves that they manufacture. Mr. McCarra replied that they do not generate sales tax on those sales, and Mr. Dearing explained that is why the Economic Development Corporation requested some of the estimated sales tax Director McCamy asked if SCV Valve, LLC had received any cost estimates for the fire sprinkler system. Mr. McCarra referred to a page in the handout for multiple cost estimates that vary depending on the availability of water supply. The least expensive option is estimated to cost $132,750 if there is adequate water supply and pressure, and the most expensive option is estimated to cost $356,125 if there ist not an available water supply andi installation of a water tank and pump would! be required. President Wylie stated that it was good to see the different range of cost estimates because SCVI Valve, LLC does not know which Director McCamy inquired ifs SCV Valve, LLCi is seeking partial funding for the fire sprinkler system or 100% offunding. Mr. McCarra replied that they are: seeking 100% funding for thei fire sprinkler system. Director Helpenstill asked ift there is a timeline for when SCV Valve, LLC expects to have a definitive cost associated with the request and know. what type of fire sprinkler system would be required. Mr. McCarra explained thati they! have spenta al lotoft time andi money preparing for the original1 11,980 squaref footh building,  numbers that were provided to the Board of Directors.  type ofs system the Fire Marshal would require.    Minutes (cont.) 06/25/2024 Page 6of8  and now have to alter some oft those plans for the 28,500 square foot! building. President' Wylie explained that the Board of Directors would need a definitive cost to approve any kind oft funding and suggested that Mr. Dearing explained that any funding from the Economic Development Corporation (EDC) must follow a lawful timeline. If the EDC approves funding fort the project, it would then have tol be presented tot the Santa Fe City Council for approval. If the Santa Fe City Council approved the funding, then there is a mandatory 60-day waiting period for public comment on the project. Following the 60-day comment period, the EDC Board of Directors would again have to agree to move forward with the project and the EDC would have to enter into al Performance Agreement with SCV Valve, LLC. Mr. McCarra inquired about any allowances for an accelerated timeline, and Mr. Dearing replied that the EDC Board of Directors could meet at a special Director Schwertner askedi if SCVValve, LLC was seeking cost estimates fori the construction of Phases 4 and 51 from local contractors. Mr. McCarra replied that they were. Mrs. Davis stated that they also sought a President Wylie thanked Mr. McCarra and Mrs. Davist for attending the Economic Development Corporation  SCVValve, LLC meet with the Fire Marshal.  meeting, but that the timeline must bei followed according to state law.  cost estimate for the fire sprinkler system from a company within Santa Fe.  meeting and Director Summerville complimented the presentation from each of them.  b. Discussion on setting the fiscal year 2024-2025 budget for the Economic Development Corporation Executive Director Rudy Zepeda presented the proposed budget for the fiscal year 2024-2025 (FY25) for the Economic Development Corporation (EDC) to the Board of Directors (Board). It is anticipated that the Board will Mr. Zepeda explained that the forecasted sales tax for FY25 is $1,074,400 based on the City of Santa Fe's calculation for additional sales tax. The estimated interest and investment income remains the same at $125,900 based on the consideration of the EDC using some of those funds. However, there are unused funds from fiscal year 2023-2024 (FY24) that could be used to replenish any withdrawals, so the $125,900 remains unchanged. The Director Schwertner asked if the EDC were tot fund a project such as the one proposed by SCV Valve, LLC whether thoset funds would come from the FY24 budget or the FY25 budget. Mr. Zepeda replied that thei funds would come from the FY25! budget because thati is when thei funds would be spent, and would require al budget amendment. For expenses, the EDC projects an increase of $5,300 for Administrative Services, which is in line with the 5% Training and' Travel is proposed to decreasel by $6,0001 from $17,000inF FY24t to$11,000i in FY25 based on previous  adopt the proposed budget at the. July 30, 2024 Board meeting.  projected increase from FY241 tol FY25i is $112,450.  annual increase for employees, bringing the total for FY25 to $96,000.  year'se expenditures.  Financial Audit Services is projected toi increase $300 from $9,500 in FY24 to $9,800 in FY25.  Advertising will remain unchanged from FY24 at $30,000.  Dues and Subscriptions are projected toi increase by $1,000 from $1,000 in FY241 to $2,000inF FY25. Legal Services is projected to decrease by $3,000 from $15,000 in FY241 to $12,000ir inF FY25.    Minutes (cont) 06/25/2024 Page7of8  Web Servicesi is projected toi increasel by $3,000f from $2,000nF FY24t to $5,000inF FY25 based ont the EDC planning Professional Services is projected toi increase $8,000 from $10,000 in FY24 to $18,000 in FY25 based on current subscriptions to service providers such as CoStar and LoopNet, which are commercial property listing services. Projects and Grants is projected toi increase by $90,0001 from $810,000i in FY24 to $900,000 in FY25. This account is set aside for infrastructure projects, which the Board of Directors previously approved for 75% of the budget to Program Expenses is projected to increase by $15,0001 from $100,000 in FY24 to $115,000 in FY25. This account is set aside for the Business Expansion Attraction and Retention (BEAR) program that was approved by the Board The revenues and expenses are budgeted to balance out at $0, which would leave the beginning estimated fund balance afs2898915unchanged. Mr. Zepeda clarified that there are currently no approved projects for the Projects and Grants account, which is $900,000 and the odds are likely that the estimated fund balance will increase during The Economic Development Corporation's annual operating expenses are $185,300, which is $15,400 per month. Director Schwertner asked for clarification on the difference between Projects and Grants. Mr. Zepeda explained that grants can be allocated over many different years, such as $100,000 payments annually for a company's expansion andi increased employment. A project would be aone-time cost for an infrastructure project. Director Schwertner asked which account the construction of office spaces at City Hall would come out of. Mr. Zepeda explained that the funds will come out oft the Contractor - Capital Outlay account, but itis not budgeted for FY25 because the funds may be allocated during FY24, which would require a budget amendment to the current Discussion on upcoming 2024 Governor's Small Business Summit to be held on July 18, 20241 from 9:00 Director Schwertner asked that this item be added to the agenda and informed the Board of Directors (Board) that therei is no cost for Boardi members and Economic Development Corporation (EDC)staff. Director Schwertners stated that there are different awards that will be given out during the 2024 Governor's Small Business Summit, and Secretary/Treasurer O'Connell has submitted a nomination for Anthony Macaluso, owner of The Gun Vault of Texas, LLC. Director Schwertner stated that she would ask the Santa Fe Chamber of Commerce President/CEO Director Schwertner stated that the subjects tol be covered at the event will by cybersecurity, lending, marketing and The capacity for the event is 200 and there are already 100 registrants, SO Director Schwertner encouraged EDC Coordinator Josh Dearing stated that he would send al linki to the registration webpage along with the code to  toh have their own webpage and domain name in FY25.  be allocated to infrastructure projects.  of Directors earlier in the meeting.  FY25.  This translates to 188 months of operating capital.  budget.  a.m. -2:30 p.m. at Galveston College  Amber Miessner to create a flyer recognizing Mr. Macaluso for his nomination.  artificial intelligence. everyone to register quickly.  allow for free registration for the Board members.    Minutes (cont.) 06/25/2024 Page 80f8  Citizens' Comments and Announcements There were no citizen's comments or announcements.  Adjournment  Director McCamy motioned to adjourn the meeting, seconded by Director Helpenstill. The motion passed  unanimously, and the meeting adjourned at 8:33 p.m.  ATTEST:  Bob President Wylie,  Bzug  Director  Gfss