Feb 14, 2018 Economic Development Partnership Board on 2018-02-14 11:00 AM

[ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] [ Silence ] >> Good afternoon. I'm going to be talking to you today about total impact, and this is a model that we've recently implemented. And I'll be giving you a general overview, and you're going to be looking at this model for two of the projects today. [ Silence ] So a lot of the members here are new, so I just wanted -- thought it was important to point out the prior practice. So the prior practice was performed by myself using various scenarios, and these were entered into an Excel spreadsheet , basically how much the company would receive, what percentage, and what that would look like over a term, and then also the revenue to the city over that same term. I also used a model from UNT's Center for Economic Development and Research, and that took into account annual payroll, discretionary income, and added a multiplier to come out with the sales tax impact. And that's a bit antiquated. This was used -- it came about when Terry Clower was here. And then also used JobZQ. This is a labor tool that we use that has a very minor way to calculate indirect and induced labor. And that was the prior practice. And then this is total impact, and this summarizes some of the things that we can do with total impact. It's an Austin-based from Impact Data Source tool. And it's specific to economic development, and it's fully customizable. We brought our finest department in, our utility departments in. We had it customized to include our turfs. We did a lot of work to make it unique and customized to Denton. And then it's able to perform economic and fiscal impact analysis as well as incentive analysis. And it's very inefficient. I'm not pulling from three different things. It's all in one. So now we're going to look at an event. An event can be an expansion or a contraction. So that would be a new company or a closure for it. But for this discussion, we're going to talk about a new or expansion project. So economic impact, the direct impact would be the jobs and the sales output directly created by the event. So if a company came in with 75 employees, your direct impact would be 75 employees. And then we're going to look at the ripple effects. So under the ripple effects, we have our indirect impact, the jobs and sales output, companies supplying goods and services to the new expanded industry. And this would be in the case of maybe a new construction firm comes in and they're buying steel from a local supplier, or they might use a local accounting firm for services. And then we go on to the induced impact, the jobs and sales output created when new employees from the new or expanded firm spend their wages at local establishments. An example would be on a restaurant that is caused to hire more employees because of maybe a new manufacturing plant or other development. And then the fiscal impacts, we've got the tax revenue that 's generated by the new or expanded project. This could include businesses and households. So you assume that a certain number of workers that are relocating are going to purchase households, and the model takes that into account. And then the demand on government services, so your police, your fire, your libraries, for example, and then the cost for providing utility services. And this is the first time we've been able to capture that. So we're really excited about getting able to look at that as well. Erica, I have a question. Would you prefer we wait until the end or as you're going through? It's fine. Okay. In looking at this project or this software, it impresses me that you have to input quite a bit of data in order to allow for these economic impacts to show the actual effect. So can you give us an idea of what kind of data you have to input into the system before the system becomes relevant? Sure. We've got a project data page, and you can put a summary description. You'll see that on your one page summaries. It'll print out for you. You put in if it's in a TURS, if it's not in a TURS, if it 's a new development, a relocation, or if it's an expansion, if they already exist here in the city. So there's different forms for that that populate based on what you check. You enter the valuation, the estimated valuation. If they're already locating here, you enter their current valuation as well. Property valuation. So that would be your ad valorem. It has inputs for the amount of sales, sales taxes spent by the company. It also has inputs for the number of out of town guests that you may have for trainings or just to come in and view the facility. So it's trying to do the heads and beds and calculate some of those impacts for sales tax. That's where some of the multipliers come in. Jobs, of course. You enter the jobs and you're able to do it at 10 year increments. So we set up our model for 10 years and you can add the jobs as they come online. Same with the value. So you might have improvements and then BPP. They might be having an expansion for your business personal property. You might see it come on in later years. So it takes into account a lot more than you can physically do just with an Excel spreadsheet. It takes a lot into the model and puts a really good output . And then you also have different sheets. And another one of the sheets is the public investment. So you can put in your DME revenue. You can also put in your permit fees, what your estimated permit fees are. And we use open counter to estimate that. And then it calculates all that and inputs it into the model. The question I'm having is kind of a fact checker kind of a deal where some people may come in with a lot of blue sky, you know, and very optimistic projections. Sure. So how do you make sure that we're not just, you know, drinking blue water? One of the things that we changed in our application, we used to have a Word document application. We now have an Excel application. We asked for your table. We have a separate table for your investment and then the table for your estimated value. And we do inform our applicants that they will be held to threshold based on that value. Now, your investment is where you show your leveraging because there are certain things that you want to include. It also includes your soft cost, your engineering, your grading, some of the other things in there. But it allows them to explain that. And while we still are looking at the valuation, what we think that will be the estimated valuation. Thank you very much. John, I also want to let you know, in addition to what Erica said about letting our applicants know that we need them to give us their best realistic projections, because that's going to be the basis for their contract. And there are thresholds that must be met per the contract. And if they are not, then incentives are not received. So it's a communication with the applicants from the beginning about what the expectation is as we help them get their application completed. Thank you very much. You're welcome. Now I'd like to talk about the fiscal impacts, the benefits . So you have your public tax revenue, your property tax, your sales tax, your hotel occupancy tax. And then you also have your other public revenue, your utility revenue, franchise fees, building permits and fees. And under the sales tax, you're looking at the business's taxable sales, the taxable spending by the business, labor spending, and then your out of town visitor sales that we mentioned. And then after the benefits, we look at the physical, the fiscal impacts of the costs. So you have your public costs, your cost of providing municipal services, and then your cost of providing utility services as well. And then, of course, the cost of your incentive. And that can vary and it can be layered. But property tax abatement, a rebate, meaning chapter 380 on the rebate, a sales tax rebate. That can be both of your regular retail sales and your construction sales and use tax using the Texas Direct Pay Permit. And then we have a debt municipal electrics economic growth rider that we can add in. And that's over a period of five years based on how they qualify and the cash incentive if we decide to do that, especially in the case of the investment fund. And so we've looked at our benefits and we've looked at our costs and now we're going to talk about the net benefits. We're going to look at basically less the cost of the incentive. And in general, I mean, we can set our own parameters, but in general, the net benefits should be positive. I've included the sheet here. It's a little hard to read, but you see the subtotal benefits and the subtotal cost. And at the bottom of that, you see the net. We definitely want that to be positive. The rate of return. I'm going to show you an example in a second. But the larger the rate of return, the better it is for the city, the better deal it is. And then in general, the payback, the shorter the term, the better it is for the city as well. Okay. So here you have an example. This is actually was performed for a prospect. But you can see that this is also what you have in your backup for your other ones, but you have your in the first table here, you're showing your benefits. Then you're also showing your costs and then you're showing your net benefit. The other items I highlighted in my presentation are at the bottom here. So you'll see that you have your total incentives and then you have your incentive per job. Your rate of return and the payback period. And so you're looking for this. This is showing you the nexus of basically where these two intersect, both the incentive and then the payback period. Another thing that's important to note here on the top left is you'll see your jobs, your direct and your spinoff, your indirect and your induced is your spinoff. And then your salary and your investment. And then you can see a little highlight of the residential impacts as well. And it's based on how many? 4.4 homes. It's pretty conservative. That's one of the things we liked about this model. We actually looked at three models. Remy, ImPlan and Impact Data Source when we chose this one. And I believe that they were the most conservative and more realistic, less inflated. If anyone has any questions, I'd be happy to answer them. On the residential side, it estimates about 15% of the 199 employees would relocate so that the other ones are coming. I mean, that's hard to know. Are they coming from people already here and robbing from another company? Well, we struggled with that. We actually inputted, both myself, Michelle and Christina, inputted at least two applications of incentives we've already done and one of them was Safran Labanol. And that was a case where it was 700 employees. So we had to look at two models, both ones that were because they relocated from the metro area. So we actually performed two models to look at both. Erica, I did have a question on this one here. Under where you put residential investment, excuse me, development, what does that 4.4 homes means? That's how many they're thinking from based on the number of workers that are going to buy a home. It's very conservative. There may be a lot more. They also use, but I didn't mention, I mentioned the AIS, they use Remy multipliers, but they base it on industry code. So I select an industry code and they base some of their outputs based on that as well. So in this scenario, you have 125 direct jobs created by this incentive, okay, with an average salary of $76,000, but you're only producing 4.4 homes purchased? That's new homes. New homes? Yes, sir. But it doesn't take into the effect building new homes or just purchasing existing homes. I'm just trying to get an idea of how many homes are going to be purchased by these 125 employees that are quote reloc ating or? Right. John, we will find out for you, okay? Okay, we'll get the definition from the big book of codes. I'm looking at it right now actually. If I read this right, the estimate is that 30 workers will relocate. So the other 120, other 4.4 homes and 29.9 workers reloc ating. I see it. And that's an estimate based on somebody's numbers. Okay. Of those 30 people that are relocating, they're going to buy a home here. If you're relocating from Flaremount, you may commute. That makes sense. So I guess a lot of this relocating depends on if I'm moving from Alaska and bringing all my people down here or I'm coming from Dallas and moving up here. Right. And just as a general comment, this company has developed proprietary formulas based on Department of Commerce data, the RIMS data. So there are things that calculate in the background based on their proprietary research and development. And I also want to point out that this is a program that's used by many, many, many communities and economic development corporations, especially in Texas because it's a Texas-based company. But they're very thorough in their development of their models and they're tested in the marketplace through use by other EDCs. Thank you. We're upgrading our model based on the most recent data model out there. Absolutely. Yes. And we can continue to customize it. I've got an ongoing list for the next time we update it. Things I'd like to see. Anybody have any more questions or comments? All right. Thank you. Our next item is an incentive request, an application item number 18 0 1 0. Receive a report and hold a discussion regarding an incentive application from the United States cold storage. Caroline will present that. Okay, we do have an incentive request from United States cold storage and we have a representative from U.S. cold in the room with us here, Tim Franciscus. And he's been working on this project from the beginning, which actually our first contact with U.S. cold storage was in January of 2017 when chamber staff received a call from a broker about a project. And starting at that point, it moved into the economic development partnership process of collaboration and helping get questions answered and due diligence done for the potential location project. And here we are today. So I'm going to give you some details about the company itself and then about their request. And Tim is available to answer specific questions from the company's side if that's something that any of you would like for him to do. All right. We'll start with the background. So U.S. cold storage provides their clients with refriger ated and frozen food warehousing and transportation. They've got 38 facilities in 13 states and about 2500 employees. Some of their current customers at their facilities include well-known brands like Kraft, Kellogg's, Coma, Unilever, and Butterball among many other types of clients. They do have four existing facilities in the DFW Metroplex in Arlington, Dallas, and Fort Worth with a total of 32 million cubic feet. And these facilities, one thing that I learned in the process of researching is that these facilities, they build them and they use them for a long time. We're talking 30, 40 years in these locations. The company began in 1899, which is kind of cool, as American Ice Company and then were renamed to U.S. Cold Storage in the 1920s and became a wholly owned subsidiary of John Swyer and Sons in 1982. The project itself that's being considered for Denton, and I do want to emphasize at this point that the information that you have is the best information that the company can provide to us at this point. Things are still a little bit preliminary, so we're giving you the best information that we have at this date and time . They're considering 6 million cubic feet of refrigerated warehouse with 2,500 pallet positions on a 40-acre site on Jim Crystal Road, which is inside the West Park TURS, and you'll see a map of that in a minute. Their land sale did close on February 2nd. The plan for the facility is to offer several different types of storage, case picking, repacking, distribution and transportation solutions for food production facilities in the U.S. and in Mexico. Their preliminary plans do provide for rail service at the site and export services to Mexico, cooler and freezer storage, of course, and some on-site customer offices. And their plan right now is to use eco-friendly refriger ation technology and include industry-leading safeguards for the environment. You can see here a picture of one of their existing facilities in Dallas over there, and then this is their USC S Denton site on Jim Crystal Road. Let's see if I can get my mouse there. Jim Crystal Road right here, Western Boulevard right here, and the railroad track is right here. Any questions about that? Everybody know right where that is? The pond will be drained. All right. So the project itself in terms of investment and jobs, the company is going to be making an approximately $ 34 million investment, which is going to add $28 million in new value. And for those of y'all on the board who are new and this is the first time you've seen one of these projects and the application and the information that we bring to you, the investment can include soft costs, other things that don't add additional value. But we want to communicate to you the complete picture of how much money the company is going to spend versus what the additional value is. They plan to create 44 new jobs in the first year of operations and then have 67 new jobs by the third year of operations. Average salary is a little bit over $36,000, and they do offer benefits to their full-time employees. And my understanding is that the vast majority of their employees are full-time and therefore benefits eligible. Again, the company is estimating at this point that they would be a 1.5 megawatt per year power user from Denton Municipal Electric, and that would put them in the category of a top 25 customer for DME. And that would be comparable to the size and power usage of Aldi as a customer, the Aldi distribution center. So I forget that there are Aldi stores now to be specific about that. Please got a question. Yes, ma'am. Yeah, the other side is fine. There wasn't a breakdown and you said most of the jobs would be full-time. Do we have any kind of percentage on that? I'm going to say above 95% of employees are full-time. I'm looking at Tim. Yes, that's correct. We have no part-time employees that are down. So they're all full-time. All of our U.S. clothing companies are full-time employees. So that means they all qualify for benefits. Right. So for everybody out there in TV land, Tim said that almost all of their employees, except maybe, I don't know, one, no . Almost all of them are full-time. Thank you. Okay. So quick pro and con chart on the project here. You guys had a chance to look at this in your backup. It's not a target industry. They are adding a significant amount of new value. The majority of the jobs will be full-time and benefits eligible. The majority of the jobs are not high-skilled. Average salary is a little over $36,000. But that's below the Denton County average salary. They will be, as planned, a significant utility user for Denton Municipal Electric. Since this is a project in the TURZ zone, it will kick off Phase 2 of the TURZ improvements, which are improvements that run along Jim Crystal Road. However, if they're offered a tax abatement, that will reduce revenue that would go into the TURZ fund to reimburse the developer for those public improvement costs. Jim? Where did the $36,000 average salary come from? Is that market-based or is that? No, that's something that the applicant provides in their application. Oh. Yeah. Tim, would you like to come up, please? We can't. The folks, all the people watching at home, those hundreds of people want to hear what you say. I'm sorry, the only person I do know, my husband, is watching, so. Tim, come to the mic. Timothy Francis, Son with the United States Cold Storage, for the record. To answer the question about the salary, as part of the application, it asks for the hourly rate. Having said that, it doesn't calculate overtime, so I just have a $15 an hour rate, but our facility is typically running between 15% and 20% overtime. So the warehousement portion of this, it's probably, they 're probably making between $45,000. But because of the way the application is set up, that's the number that, the calculation that you're getting. Did you, were you able to look at the local market to see what the average is for your type of work? We did an analysis back in 2016, actually went back to the end of 2015 for the Dallas-Fort Worth Metroplex, where our facilities were. And we currently have a pay scale in place. So there is a three-year, it's over, it's basically, they get an hour, $1.50 an hour more, and that's divided up amongst three years. So we are constantly analyzing the, you know, what the going rate is in the area. We'll do the same thing for Denton. Any other questions before I hand it back? I have questions, but it's about the building and energy use. So I don't know if there's another slide that addresses that, or if I should just ask him. It would probably be a good time to just talk about it since he's here. Okay, so in the, is your company building the LEED certified? Is that where I read that? Or is it just vested? Okay, so, but it does say that you're using eco-friendly refrigeration technology. Does that mean demand-side management, energy management type technology? We do have energy management technology, depending on the refrigeration company that we select to run the project. But we have, it's constantly monitored, and it is basically to run our refrigeration as efficiently and as eco-friendly as possible. Having said that, in Dallas, we do have what's called an ammonia cascade system, which cuts down significantly on the amount of ammonia, and also is just the most eco-friendly refrigeration system out there in our industry. So again, those things are all in consideration. We're still pretty early on in the game to know exactly what type of system will be in place. But that's what things that are being looked at. Do you have any plans to use renewable energy? I did notice that there was a lot of concrete on the top of your building. Actually, it's an insulation. We don't have any concrete on the top. So we do have limited, I guess, irrigation landscape that we use at our facility. And again, we typically in Dallas, I use Dallas as an example, we worked with the industrial park to make sure that everything fits in line with their restrictions. Okay. So I was very impressed to see that you've decreased your greenhouse gas emissions, and the things that you're saying are the ways that you're doing that. Yeah, just Unilever, if you look up Unilever as a worldwide company, they are extremely, you know, they require a lot of us at our facility in Covington, Tennessee. And so we learned a lot in that project, and we'll be rolling out some of those things in our new projects throughout the United States. Thank you so much. Sure. A quick overview about the West Park TURZ, again, since we have some new members here, and we've been referencing the West Park TURZ. It's an approximately 800 acre area north of Airport Road. And the TURZ itself took effect on January 1 of 2013, and the city and the county both contribute 40% of the ad valorem tax revenue into a fund that is then used to reimburse the developer of infrastructure improvements in the area. The current estimate for the TURZ is that it would generate $14.3 million into that fund over 25 years. The current fund balance is $230,000, and that is because the WENCO facility, distribution facility went in, actually came on partially onto the tax rolls. It's not fully valued yet, but we are seeing some money into that fund now. Speaking of WENCO, they did complete the Phase 1 improvements, which ran along Western Boulevard, included water, wastewater, drainage, and road improvements. So those have been finished. And reimbursement of those expenses out of the TURZ fund is going to start this year, because, again, there's finally funds in the TURZ fund that can be used to complete or start that reimbursement process. Incentives that are given to companies that locate inside the TURZ reduce the amount of revenue that goes into the T URZ fund, which, again, is ultimately to be used to reimburse the infrastructure improvements that occur. So these are just the factors that we all need to keep in mind when we're talking about the TURZ. Questions? And then a quick touch on our policy for tax abatement and incentives that's in place currently, and we are discussing changes to it, but we are operating under the 2016 policy right now. Businesses may be considered for a tax abatement of 25% if at least $5 million in investment or value is met by the project. The length of the abatement can increase or can go higher with higher investment, but it may not exceed 10 years, and that's by state law. Under the policy, the percentage of an abatement can increase in 5% increments for additional factors that make the project more desirable. So the request that we have from U.S. Cold Storage is for the maximum allowable incentive under the current policy, and they state in their cover letter that approval of tax incentives will go a long way in demonstrating community support to their parent company as they finalize construction plans for the project. So we start the analysis by looking at the current conditions, which is not going to take very long. The current valuation of the land is a little over $7,000 because it has an agricultural exemption currently, and that brings in $45 a year in tax revenue to the city. So what we do next is look at the projected ad valorem valuation and revenue based on the information that's provided to us in the application, and we did use the market value for the estimated valuation of the land. Again, since it's an ag right now, we've got to have a different value to put in there. So you guys can read through that. It was in your backup, but I'm going to go ahead and kind of take you over to that far column about the estimated net annual city tax revenue. The bottom line down there is that we have $103,000 available for incentives on this project, and the reason why is because we can't use land. We don't use anything that's generated by land to provide funds for incentives. So we're just looking at the revenue that's generated by the business personal property and the improvements. Questions about this chart? Ryan? Oh, yes, sir. I'm sorry. What about rollback? Erica, I'm going to ask you. He's asking about rollback. Rollback covers a period of five years, and that only goes to when the TERS was created. So it's not going to go before the TERS was created, essentially. Does that answer a question, Jim? Did we figure any of it into this, Lynn? So there's nothing , no rollback in it because of the TERS. Right. No rollback because of the TERS. Okay, so we ran our 25, 30, and 35% tax abatement models. We also ran a model with construction sales and use tax only, and then we included the DME economic growth writer in all models. And I don't know if this is, I don't think this is something that I've talked with you board members about, and you may have heard about it in the past, but we're going to do a little refresher about what the economic growth writer is. When Denton Municipal Electric adopts, or when the City Council adopts the rate schedule for Denton Municipal Electric, there is a rate called the economic growth writer that's available to certain customers who meet a certain level of electric demand and whose load factor is greater than DME's system load factor. That just means there's a minimum threshold in a couple of areas that they have to meet. If they do meet that, their monthly billing demand is reduced on a sliding fee scale for five years, starting with 50% in year one and going down to 10% in year five. So every month there would be a discount to the bill. So that can, depending on electric usage, add up to a significant incentive for a company. And this is available to new customers and customers, existing customers adding new demand. Yes, ma'am. So is the monthly billing demand reduction, is that applied to the amount after that threshold or the total amount? It's the total amount. Okay, thank you. Did you have a question, Keel? Is it 50% off each month? Yes, in the first year, in year one. This is a summary chart of our analysis, and we started with some assumptions that we took from prior information that you guys saw in the slide presentation. And what we did was based on the current incentive policy, the level of investment that's being made, that equates to a six-year term, and we looked at this 25% abatement across a six-year term for a total of a little over $154,000 here. We also considered the construction sales and use tax reb ate, which is another tool that we have used on a couple of recent projects in the past, but the way that works is the company would source their construction and business personal property materials to Denton so that Denton would capture the sales tax that's associated with that. And then we would be able to rebate all or a portion of that because we captured it locally. So that equates to $132,000 in our estimate. And then there's the DME economic growth rider, which rolls out over five years, and in this case, based on demand estimates, would come out to about $300,000. And then, sorry, if we total all those up, that's $586,000 kind of consideration that we have to work with. And then down there at the bottom, we show the net tax revenue to the city. And this is, again, just to the city, not into the TURS fund over those six years with that incentive scenario in place. Questions? Yes, ma'am. I do. About the economic growth rider, because I'm just now really learning about that. I knew that it was in our policy, but seeing it apply here, especially with a company who has extremely high use, I'm assuming that it's been evaluated and estimated that even with this, that will still cover the cost of our energy that we have to purchase. That's a calculation that's done on the DME side, and I don 't want to speak for them. We have to contact them with the information about the usage that we get, and they make their calculation. So I would be glad to facilitate getting you an answer about that, but I cannot answer that question myself. So it is, even with the growth rider, are we covering the cost of provision of the energy? Okay, yeah, I will find out. Make a note real quick. Caroline, has U.S. Cold Storage looked at the electric calculations in agreement with the usage? They're reviewing all of that right now. Is that correct, Tim? Yes. They did their initial estimate when they made the application, but they're delving in further to that, and we've connected them with Den Municipal Electric to make sure they have the right folks to answer their questions. Any other questions? I'm sorry. Do you have a question before I move on? Yes, I needed some help reconciling the two numbers, please . I'm looking at the top incentives and the net revenue at the bottom, and I'm trying to understand what's going on there. Okay, so I had to do a little bit of squeezing onto one slide. So the revenue, the column says total, right? But the total for the net revenue is just that very bottom number, and then the total of the 25% abatement, the construction sales and use tax rebate, and the EGR, that totals to the $ 5.86. Is that what your question is? Incentives are benefits given to the company. Okay, so benefits given to the company are $5.86 to $9.98. Collections to the city are $5.48 to $9.40. It's after the $5.86. Right, that's the net that we're getting. So the gross number would be larger? Yes. Thank you. That's the missing piece. Okay. The gross number would be 700? The $154.998 to $5.48? It'd be the $5.86 plus the $5.48. Yeah. No. No, it's the $5.48 plus the $155. Yeah. The other two are immaterial to the city's revenue. So if they're immaterial, then why are they presented here? Because they'll be a benefit to the company. The 25% abatement is revenue we're giving back to them for ad-horm taxes on the building only, not the land. Right. So when we're talking about the city, this is revenue that would go into the general fund. That's general fund revenue. The construction sales and use tax rebate, we're considering that at 100%. So we wouldn't receive any revenue from that particular. If we were only considering 50%, there would be revenue shown there. But we're really only talking about the ad valorem value that would go into the general fund. So for year one, though, the estimated gross revenue to the city from taxes is $116,000. We're going to give them $26, 000, and then that's $91,000. That's how that number has arrived. The other two are coming from the construction rebate and the DME rider. So help me with the DME rider again, please. What it is or how it's-- Yes, please. Okay. So it's a reduction in the company's monthly demand billing. So they get their electric bill. It's reduced by half. The demand billing portion of the bill is reduced by half in the first year of the incentive. And then it goes down to being reduced by 40% in the second year, 30%, 20 and 10 in year five. Thank you. Yes. Yes, ma'am. Good questions. Anybody else? I have a question about the utilities again. Not necessarily electronic. I understand that question is going to be answered soon. But on the water usage, it says 7,000, like 722,000 GPM. Is that gallons per minute or how does--what does GPM mean? I have no idea. GPM is per month. Okay. And so on that, is that typical of an industrial user ? I'm not really sure of the water usage and can our system handle that? That is well within our system's ability to handle it and how it compares to other industrial users that we have on our system currently. I can't answer that specifically for you, but that is not going to be any kind of burden on our system. That's good. I appreciate it being in the application just so I have some-- Well, and thank you for mentioning that. That's a part of the application that we have recently changed and beefed up so that we can capture that information and share it with our utilities folks so that there are no surprises for them or, you know, that we can collaborate on looking at the project as a whole. What will the wastewater and the water usage be worth to the city? I'll have to get that information for you. We did not specifically run that for their cost and for the billing on that side of it because it's not significant enough that we would have to reach out to them for that, unlike the DME issue where there's a rider in play. That's why we asked them specifically. So if that's something you'd like me to check with our water and wastewater guys on, I can. I think we just need to recognize that it's an additional benefit to the city and revenue because it's a new business . Right. And the model, the total impact model, takes all of that into account. That's part of the reason why we wanted to have that model because there is a cost to providing those services, water and wastewater, but there's a benefit and offsetting billing that we're able to do. So that's why we like that model because it brings the whole picture together. Is the facility heavy water user? I don't believe that it is, but Tim says no. Okay. So Jim, Erica, she handed me sort of in the depth of our model, here's the page where it calculates all that. I don't know if you really want to see it, but it's here. And it's what goes into producing that one page summary of the project's cost and benefits. So the rates are put in the model and updated when they're changed with the budget each year. I think Tom has a question. Caroline. After serving on the on the public utility board for eight years. I was extremely impressed with how complex our financial operation as a city is. I think the average citizen doesn't appreciate what goes on here and what it takes to keep a city afloat and functioning. My question is this, and this is not a reflection on this particular company, but when giving incentives. Are we able to get a complete idea that we're not putting ourselves in the hole. Incentives to bring in new businesses are we satisfied that that is the result that we're achieving. That's why we wanted to develop a total impact model of our own that's fully customized to our city that takes into account all the municipal utilities that we provide and our franchise fees and all of that. That's all in the background. And, you know, that's important to us as a department to make sure that we're factoring all those things in so that when we look at the bottom line. What is the total benefit to the city. And that is not something that we were doing fully before we were able to get that model. So we still want to double check with our other methods. We want to talk to our departments. But what you're getting at is where we have moved. We're moving toward that and this program is a big part of it. Okay. So that was basically my question is that it's beautiful. I like it. It looks nice. But at the same time, we wouldn't make sure we pay our bills right. Absolutely. Well, that's where the net. After the incentives are given out in three different ways the net to us over six years is still $550,000. But my question was that we're receiving that but does that make sure that we don't have any deficiencies elsewhere. We feel confident that I mean, and that's what I wanted to hear. Would you like to. I think it's a great question. And that's really as Caroline said, where we're really trying to move is that we understand what is the not only the benefits of a development and that's frankly what we've looked at in the past is the benefit analysis. What are the costs of the development. What's the cost to serve. I think is maybe the root of your question, john. It's sometimes difficult to get that on the utility side, the rates are designed that we charge through our utilities are designed to recover all of our costs. So that's a fairly straightforward calculation for us as long as they're paying that rate, they're going to recover their costs. The tax side is a little bit more difficult because different users. Some can some can pay for their services and others don't. As a fact, you know, we've talked about last time as residential properties typically don't pay their property taxes they pay as a resident, they don't pay for all their services they consume commercial entities typically make up that difference. So, it's harder to get that in that model, the total impact model there's a way to try to calculate that and estimate that it's still a squishy number, it's not an exact science that we have down just yet but that we're trying to look at that and bring you back and really analysis that gives you all those components that's a technical term squishy. But, but it's difficult to get that down to an exact science. But that's what we've tried to bring you forward today. Hopefully that answers your question but the utility side if you're asking about those that's built into the rates the tax side is a little bit more difficult to assess. Thank you. All right, are we good on this one. I have a question for 10. We have a lot of really awesome companies in in some of them that aren't so awesome as far as community involvement . Is there an organization encouraged its employees and managers to be involved in civic clubs, rovers quantities holding out away campaigns join the Chamber of Commerce. Because if you answer yes to those I'm going to circle back around and make sure that you're doing that. Absolutely. I'd also like to mention, as he's on the presentation we store food as a majority of what we do. We're a huge donator to local food banks. As you can imagine there's a lot of our customers who donate product. Some of them donate their own product and some of them ask us to do the donations on their behalf so we are a huge don ator to to food banks in the area. That's just one of the, you know, civic organizations that we that we participate in. Wrap up the presentation with some key points. US cold storage is a leader in its field and it does make long term investments in the communities where its facilities are located. About 99% or more of its employees in the Denton facility will be full time and benefits eligible. Salaries are industry competitive and as we heard Tim say there's opportunity for overtime which could raise the average salary. The project does add significant new value and it is going to cause the TERS phase two improvements to initiate. The facility as projected at this point will be a top 25 DM E customer. The project is not one of our council designated target industries. The majority of the jobs are not high skilled. The incentive for development already exists in the area with the West Park TERS and a tax abatement will decrease the revenue that goes into the TERS fund for those infrastructure improvements in the area. You have several options in front of you today. The first one is to not offer an incentive. You can offer an abatement per policy guidelines, offer construction sales and use tax rebate or a combination of those or something else of your choosing as the EDP board. Since the area the project is in has already been incentiv ized via the TERS fund. Staff does not recommend the use of ad valorem tax incentives in this case. We do support the use of the $300,000 DME economic growth rider as allowed under the current utility policy. And that is an automatic, if they meet the demand threshold , that's something that they will automatically receive under the policy. And now is the time for board's discussion. So some of the longer tenure board members remember that we normally go into a closed session to discuss the incentive options. But most of those have been super secret. Companies that haven't negotiated things. They're still looking at other communities to move into and the two that we have today are not under that category. So we're wide open to get to talk if there's anything that I guess we feel like we need to go into a closed session for. We'll make sure that that meets the criteria before we do that. But so we're so this is the time to discuss that and then we'll come back I guess after our work session to actually vote or take a recommendation. So this is just for discussion purposes. We'll come back in our actual meeting. We're still in a work session. We'll come back in the meeting and entertain any motions on either one of them. So this is discussion time. Anybody has any more comments or questions? For clarification on the options and so then looking back at staff recommendation. Staff recommendation is number one. But with the electric because that's not considered necessarily an incentive. Right. It is an incentive but it's it's an automatic incentive if the demand billing is is met. Met. The threshold is met. Yes. Okay. You said number one. Right. Right here. The incentive that staff is recommending is the. Staff is recommending number one. Correct. I think I should have rephrased number one to say no ad val orem incentive. Right. That's essentially right. Okay. Thank you. So this is a little different because it's in the TURS. So if we do an ad valorem incentive and take money rebate that back that money doesn't go into the to the TURS fund to help repay for the infrastructure that's been put in place there. So that's where we've had some discussions in the past on other projects that were not in the TURS. This we already have an incentive program going into that land area through the TURS. So there's already an incentive there that theoretically is passed on to the. Right. And that I think maybe it's important to clarify that that as Marty said theoretically that that incentive is passed through to an end user who would purchase the land in the TURS. What distinguishes this to be different than WINCO? It's a similar project. U.S. cold serves different clients. WINCO is serving its own grocery stores. The WINCO project I mean their their footprint is larger than this footprint would be. I mean they're over 800,000 square feet. This project would be two hundred and five. Phase one. Phase one. But it is again because the company hasn't made the final decisions about how this project is going to roll out exactly. There could be phased development and it could be larger. So phase one is two hundred and five thousand square feet. What could be the largest potential facility? Okay. So he says Dallas is five hundred and twenty thousand square feet. So it could be could be larger. The example that was used here showed a 25 percent abat ement as the example. Why was that chosen rather than 30 or 40? I'm sorry rather than 30 or 35. Why was that shown as the example? That's the minimum amount. I mean that's the amount that they would qualify for based on their capital investment. And then just basic without any of the additional factors. So that's why we showed that one. So under the information that's been presented they would not qualify for the 30 percent or the 35 percent? They did they did check additional factors in their application. And they could have significant capital investment is one of the additional factors. And then local hiring was one of the other additional factors that they would qualify for in their application. And I have the figures per year for 30 and 35 percent like what what the rebate would be per year. Ultimately the recommendation was not going to be for ad valorem incentives. So in the interest of brevity in the presentation we showed the 25. If you would like us to do that differently in the future we'd be glad to. I just wanted to know what your mindset was or you know why show 25 rather than 35. It's because it's the policy minimum. Policy minimum and they didn't qualify for the for the higher ones right? They could. They could but they did. Yes. But we weren't going to recommend the ad valorem part and I was trying to get it on the slide. So we can do it differently next time if that would be better for you. Keeley. So my I'm good with your recommendation. My my concern still is the utility usage to make sure that that is going to be we're going to recover our costs. We have a lot of discussion about energy lately in our city . And in making sure that our rates for our customers stay. Stay affordable. Affordable. Yes. And just making sure that the residential customers aren't going to be making up for the amount that these people use but don't pay for. So I just want to make sure that that's not going to be an issue. And also so I'm assuming after the six years because that's how long it's recommended for right. The DME incentive will be for five years because that's what their policy is for the growth rider. So it's not six. Okay. No ma'am. So after that then everything will. Yes. Will be the same. So Jessica Rogers from DME is here in the room. If you would like her to come up and address the question that you have now. Sure. That'd be great. Okay Jessica. Jessica looks excited to come up on television in front of our audience. She's thrilled. This is new for me to understand. So going forward if we have it as a recommendation I'd like to know. Sure. So Jessica Rogers now formerly of DME. I actually now work in the city manager's office again but I was handling this program until about a month ago. So Councilmember we do not lose money on this. So when we actually this is just on the demand side of the bill. So the great example that we use on this is when you go to the mall they have a huge parking lot. Right. It's because they have to accommodate for their peak period . And so demand is that part of the electric bill. Making sure that the system can handle their peak demand. The largest amount that they're going to have to. The largest amount of electricity that they're going to consume. It doesn't affect the consumption charge which is that energy charge. They'll be on a regular rate in terms of the energy charge in terms of their consumption charge. None of that changes. It's just on the demand charge. And this is a significant to put it in perspective to qualify for to be on a general service large rate. Your demand that you have to meet is 250 KVA. To qualify for the economic growth rider it's four times that. It's 1000 KVA. So our largest of the largest customers are in that economic growth rider perspective. Thank you. Anyone else? Sorry. Jill has a question. No I have a comment. Okay she has a comment. Just a general comment. Not for you in particular. Okay. Is that okay? What I'm seeing at this point in time just for the sake of discussion is on the pro side incentivizing this company that we would like to capture here in Denton County the things that stand out to me are because of responsible energy use. Because of the full time employees that are going to be locally sourced with benefits and the community participation for such a company with their history versus it taking longer to pay back the abatements for the TURS improvements. I mean in my mind at least that's what it's kind of coming down to. But I would love to hear being a newer member of this group . Because in my mind right now I'm voting for a 25% abatement . Because for me how I'm seeing it boiled down to the pros are outweighing the cons but I'm interested in the discussion. I just wanted to where I am. Everyone's in agreement with me, obviously. So I'm going to go ahead and make my motion and we can all go to lunch. Happy Valentine's Day once again everyone. Thanks for coming. I think the difference is that it doesn't mean our target market and the wages are the kind of wages we're trying to attract to Denton. I think my concern is this target market is we gave incentives to Target, to Aldi and to WENCO and they're all the same. Why do we do that and not this and what are we saying with that? Those companies, and I'm not arguing with them, I'm just saying they also fronted the cost of putting in infrastructure into the city and we're reimbursing them for that. They put in roads and utilities. That's what they're reimbursing for. So if we didn't have Target... We would have still had to have done that through the TURS no matter what. Well we didn't have the TURS. We did when we had WENCO. WENCO, yeah. Aldi and Target were two different things. They were going to have the TURS and I'm not sure if they were in it. No. They put in roads and infrastructure and we reimbursed them for those. And then Aldi would fall off the face of the earth and doesn't talk to anybody. Jim, can I clarify, so is your point being we've already incentivized these non-Target groups therefore going down that road or you're saying what message does it send to then not incentivize this group that is similar to these that we've done before? I think there's a couple, in my opinion, there's a couple of things going on. We're focusing very hard on what the rate of pay is going to be and I think the market is going to dictate what the rate of pay is going to be and it's probably going to end up being higher than what they're predicting right now. $15 an hour, then you've got overtime on top of that and right around the corner we're paying over $30. I'm sure WENCO is paying more than $15 and I'm sure Target is as well. The other thing is, is you're talking about over a six year period of time, you're talking about a difference of $155, 000. Which to me is not that big a deal. For them to lose out on or for the city? For the city to give up. I think $155,000 for what you're getting and you get the infrastructure for Jim Crystal Road as well, which is another critical piece for that area out there in order to continue some of the development that needs to be done. Are they providing infrastructure? The costs in here don't include any infrastructure to the public roads. Okay, so there is an arrangement that is being made between the engineering department and the company to provide a drainage improvement in front of their property in lieu of roadway impact fees. That they would pay for. It's an exchange. They'll pay for the drainage project in lieu of roadway impact fees that would normally be owed. So it's just kind of... That's a side deal. I mean, not a side deal, but that's an arrangement that's been made between the company and the city, independent of this discussion. Are we allowed to ask if the company is dependent upon the 25% abatement for coming here? Sure, and I'm going to let Tim answer that question. So in terms of are we dependent on that money, at this point, as was presented, we've closed on the property. The next thing it has to do is we have to take this entire project, our P&L, our projected P&L, along with any sort of incentives to our board of directors or the SWIRE board in London to get approval for the construction money. So obviously, if you're familiar with how things work over there, obviously any sort of community support goes a long way in terms of them authorizing the construction money. We have various projects across the United States. We obviously would love to be here in Denton, and hopefully I answered your question. I'm not trying to circle around the bandwagon, but I don't want to sit here. Have you, in other communities that you work with, I guess because we're a municipally-owned utility, we have our own electrical department, which makes us unique to be able to provide this rider. Have you had any experience with that in the past? I think it's pretty significant. Not with the growth rider, no. We've done projects in other communities and gotten tax incentives and tax abatement incentives. For utility use? No, aside from utilities. I have a question, sir, about the actual construction project. So you hire a construction company, and any way for some of those dollars to recirculate here? Yes, we obviously have a general contractor. There's only a select few general contractors in the United States that do the type of work for this facility, but then they sub out the majority of work, all their concrete work, electrical and things like that to subcontractors. In the area? Yes, and I don't know if this is factored into the economic impact analysis, but they rent hotel rooms and they basically move here during construction to build the facility. So a project of this size is anticipated to take how long? We would like to shoot for six months, six to eight months. Which probably means about nine months. Six to eight months. No, we have to see, I mean, there's things to, you know, ways that we can help expedite things, and that's our plan. I understand. And I understand your comment as well. The cost numbers that we're looking at is just for phase one? Is that? That's conservative. That's, yes, that would just be phase one. Okay, so there's a chance if business is better or whatever the circumstances are you add on? Yes, sir. Yes, sir, that's correct. If you look at the facility in Dallas, there's three sections. The middle phase was our phase one in Dallas. We've since built two additional phases. That was construction began in 2013. All three phases were built by the beginning of this past year, beginning of 2017 . I have a question for Caroline. So if they did come and add on, could they apply for an incentive for that new growth project? Companies can apply for expansion incentives. Right, okay. Yes. Any more discussion? Our work session. Let's move on to our next applicant. Okay. I guess I need to. EDP number 18-12 received a report and hold a discussion regarding incentive application for Fisher 59. All right. So we are going to present information and facilitate discussion on an incentive request from Fisher 59. And we do have quite a contingent from the company here in the room with us. And I appreciate you guys patience through the prior part of the meeting. And I'm sure you'll have an opportunity, somebody will have an opportunity to come up and talk. Okay. So for those of you who are not familiar with Fisher 59, it distributes Miller Coors beverage brands to about 40 counties in North Texas and southern Oklahoma. And this is a Denton company. It's family owned and operated with its headquarters here. It employs about 148 folks locally and does more than $120 million in business annually. And as a family business, it was started by Clyde Fisher and Munster in 1959 and then has expanded across North Texas and in southern Oklahoma in the early 80s and has been operating since that time. They do have a current site in Denton, which many of you are probably familiar with where this is, on 35. But their current facility consists of about 85,000 square feet of warehouse and office between two buildings and there's a depiction of it there for you. The project itself is a new 205,000 square foot warehouse and distribution facility that is going to incorporate some pretty cool aspects. They're seeking these lead bronze certification or higher level if practical for the project. And then they're going to incorporate a crane system to manage their inventory. The project itself is looking at a $31 million investment that will add 16.9 million in new value. They're going to create 67 new jobs by year 10 of the project. And that is something that we ask for that information in the application to project out 10 years. So that's that's why they're going out to year 10. They have an average salary of almost $51,000 plus benefits . Jill wants a job. Is there an application here? Y'all couldn't see her face, but she went off. We want to talk about the project's pros and cons quickly. It is not a target industry. They are going to be adding $16.9 million of new value. A verage salary is above Denton County's average salary. They're not a significant utility user, but from the environmental standpoint, they are seeking lead certification for the building. And it is a headquarters project. So to what they're considering, the company is looking at a 50 acre site in Denton at University and Mosh Branch Road. And that's a little depiction of it here. And then this is a rendering of what the potential new facility could look like down here. They're also considering a second site that's outside the Denton City limits further west on 380 at George Owens Road . So on the map, are those gas for the property? They look like that to me. The other one is still open. We're not buying that whole piece. We're buying, I call it three quarters. The quarter to the right heading toward Mosh, we're not buying. We're actually going to run a road through the middle of it. Okay. So just I'm going to restate what you said. So there are a couple of gas wells on the property. One is closed or not functioning anymore. One is, but you 're not buying the entire 50 acre site. You're buying about three quarters of it. Okay. So just for clarification, the one that's not closed has no intention of buying out and closing for the safety of the. Do you all know anything about the operators plans for the one nearest marshaling that small one? The lease is I think still got about a year and a half. Okay. The intention is they may not rely on it. Do we need to bring him up to the front? Would you like to? Sure. Because I'm just going to have to repeat everything if I save a little time. Sure. And this is Tom McElvaney. You are the CEO. Is that correct ? Okay. Yeah. You can hear me. The one nearest marshaling, which is on the left hand side, that one's still active. And I think it has about a year and a half on it, maybe a little less than that. The other one is plugged and sealed. So that we're going to be building over there under those rules. We won't build on the on the drill site because you can't. But that will be maybe parking lot at some point in time, which I guess is allowed. Question. I'll be back. You might want to stay over here. Okay. So there are some definite advantages to Fisher 59 staying in Denton. The I-35/380 intersection is centrally located within their market, and it allows them to minimize their truck mileage, fuel costs, and wear and tear on their equipment. I also understand that access to high speed internet is going to allow all of the technology in their new facility to function at its highest potential. Y'all saw this earlier in the other presentation, but we want to remind about the policy, the current policy, about 25% abatement if at least $5 million in investment in value is met, which can increase with higher investment, and then the percentage of abatement can increase for additional factors . The request from Fisher 59 is for the maximum allowable incentive under the current policy, and in particular they are seeking to offset additional costs that they will incur for the Denton site versus the out of Denton site. The cost per square foot for their land in Denton is about a dollar or a little bit more than a dollar higher per square foot than the-- So that's about a million and $1.6 million, is that-- You do math in your head faster than I do. I didn't do my math, I got my calculator out. Additionally, they're going to have another $1.5 million in site development costs for the Denton site, and then because they are within the city limits, there will be the standard fees, taxes, and after build costs that are required to comply with city regulations and code. So this is an interesting project because it is an expansion, even though it's not an expansion in place, it's an expansion in a different location, so please keep that in mind as we're going through this, but we want to look at the current conditions, their current valuation, and the current annual tax revenue that's being produced by the company at this point in time. So their current valuation is about $6.4 million, and the annual tax revenue that that is producing to the city of Denton is a little bit over $41,000. The project itself, the ad valorem valuation and revenue, it's going to produce some new valuation, of course, for about $16.8 or $16.9 million. Right here in this column, you can see that, and then we take that and we generate the estimated tax revenue, land improvements, and business personal property. Again, we can only consider the improvements in the business personal property when we're talking about money that would be available for an incentive, so that bottom line number right here is $98,340 available for incentives. And in this case, we did look at, again, like we did before , 25/30 and 35% tax abatement models and the construction sales and use tax rebate model. And here is the analysis summary there, got the assumptions up at the top that we just talked through on the prior slides. 25% abatement on the incremental increase in value, and again, since this is an expansion project, we have to take what's currently on the ground, what the current revenue and value is, and look at what the incremental increase is going to be when we're doing our analysis. Caroline, before we go on, so you're going to still use the existing facility and this will just be new, or are you moving? We're moving. Okay. So new facility, the old, is the old one for sale? Sale of loose store. Okay, so. We're getting that analyzed as you speak right now. So what are we losing from them moving? What are they paying currently? We're not going to lose anything from them moving because the existing facility will be likely purchased or leased by someone else. Someone's still going to pay the tax revenue on that facility. Unless they have that subject. Okay. Unless they have that subject. Right, unless they. I think that was enough. Did you have another question? I did, but it's about something in the application. Okay. Do you want me to keep going or would you like to ask ? We can wait until the end of your presentation. Okay. Okay. So there you can see we're looking at the 25% abatement for five years per the policy and the construction sales and use tax rebate. Again, this is set up similarly as the prior slide or the slide in the prior presentation. So the total there incentive would be a little over $131, 000 if we did a 25% abatement for five years and the construction sales and use tax rebate. And then down here, the net revenue to the city is $467,000 . Questions? Mike Rondelli, got a question? Okay. All right. So I'm going to wrap this up here with the key points. Fisher 59 has been a Denton business for 35 years and has their headquarters here. The project would increase its ad valorem value. It's intending to have their new facility be LEED certified . The average salary is 12.4% higher than Denton County's average. However, the project is not in a target industry. Basically the same options as we had before. And then the staff recommendation on this is the construction sales and use tax rebate five year 25% abat ement on the incremental value for a total estimated incentive of a little over $131,000. And you are welcome to discuss. Questions or comments? Kaylee? So I have a question on the application about the jobs created. And I guess you kind of answered my question when you said you were leaving your old facility and moving over. So I'm assuming all of those laborers or workers are moving from one facility to another. Yes. There's a couple of things going on. We're located in three locations. We're actually up in Wichita Falls. We're also in Lawton, Oklahoma. There may be with Lawton. There certainly is with Wichita Falls. Because this is going to be a big warehouse and it's a lot more modern, we may actually move a lot of our receiving for both those locations down here. So we will be moving some of those personnel down. Additionally for us, we have a pretty broad portfolio that has grown pretty consistently over the last few years. We anticipate that model to continue. And that's what we based a lot of. You know, we're fortunate we also have like the Frisco market that you've seen how that's exploded. And with new restaurants and supermarkets, it requires us to expand and buy more trucks and hire more people. So my question is about the wages because at your current facility, it says laborer, there's 57 at $11.86. Steve, you did that. Why don't you come up and go through that? Steve Richards, our CFO. So, okay. Yes. So the go ahead with your question. So that was the first part, which is more of what I'm observing here. And so on the new facility, it has the laborer and I'm assuming that matching job description, they're now getting paid $15.38 and you're adding six more of those. So does that mean that the old wages, they're actually getting a raise and that $11.86 is not going to be a wage anymore? Not necessarily. It more has to do with there are multiple classes of labor ers in there where to give a simple example, I'm going to pay a warehouse worker that has the skill and license to operate a forklift in my facility more than what I'm going to pay a laborer that is simply moving boxes type of situation. So that you have a kind of a weighted average in that labor figure and the expected increases in that category are in the higher wage value because we are going to a more techn ologically advanced facility and so we're going to require a little more skill out of those workers. But also CDL drivers. Oh, for sure. That's how it is. That's a, that's a high percentage of full time positions you have there that are lower level wages, compared to some others. And I don't think I follow your question. Well, it says the number of full time positions, laborers at $11.86, there's 57 of those, that's more than any of the other categories so I'm just looking here. Sure, so what that might include is, or what it does include for that matter is, we have some driver assistants that are included in that number. We have general warehouse labor included in that number we have the forklift operators included in that number. I'm trying to think of a missing. That hourly wage position wasn't moved down into your new facility so I was kind of confused by that. That's kind of where my question lies in there. Right. And Tom just the other category that is in there is our merchandisers. Currently we do have some part time merchandisers that while they are not eligible for benefits that is the people that are doing the heavy lifting stock ing the shelves in in the supermarkets and whatnot. It's always been very good for the city. The college. Sorry, we're, we're taking minutes on television or on television right now. We can't hear what you're saying so if we're going to talk on it, the microphone to go do just be going exactly where I was headed with this, the part time labor while it may not be a benefits eligible. It does provide a benefit to the community because it does provide a very good income for many college students in the area. I think the where she's coming from if your average was $11 an hour near the average wage is $ 24,000 a year, and now the proposal says it's going to $50, 000 a year. Are you adding that many more technical people to the staff and it says there's only a six person growth per year. So those six people making $200,000 a year. No, sir. You're combining those I mean that the math doesn't work. If you're currently if you have 57 people now making $11 or whatever since an hour. Yes, $22,000 a year. I would have to go back in there and we were both as we're going to have 57 plus six and our average wages $50,000 a year you're doubling everybody's salary. Not necessarily. Because of the weighted average in there, so that if I increase one person from $15 to $20 an hour in one category and say there's five of those people, and the other. That would be a weighted average change that's different. Excuse me. What I can do for you is pull that apart, and instead of classifying it all as a labor position split it out into the individual labor categories, I lumped it together for conservation of space on the application form. But I'd be happy to split that out and provide that to Caroline to share with all of you. Under the new jobs created it is split warehouse merchand ising and route assist, but nine of none of those have the $ 11 and 86 cent hourly wage and so that that's where my question was I thought I was looking for that wage to be moved to the new facility if that wage was going to stay. Now I have what you have in front of you in front of me. A portion of that is due to the fact that some of those are part time positions, and that is pulling down that hourly rate to the 1186 in the top section. Our expectation is that as we grow more of those do convert into full time roles and the full time roles will provide for a better hourly rate for the employees. Jim, how are you going to manage your new technology as far as maintenance of the facility that doesn't show up anywhere here. Is that going to be a contract labor or the maintenance of the new equipment. Yeah, your automated systems. Because that's a very low scale, we will yes you're right and the new piece of equipment from serious tech which is an automatic loader. That's pretty smart to run it. It may be more than that and I get that moving forward but at this point in time, I don 't know if he didn't include it in this but that was that was something we are planning on having to add. So, we're hoping it's. They sold me a pretty good bill of goods it's over $5 million so they're good. Hopefully they 're right. But also answer your question too and I don't know, and I'm against we put this together. But when we look at our average salaries where our cost really skyrockets is a CDL driver today is approaching $80, 000 our salesmen are well over that 50. So there's a lot of people making more than that average and again, the issue with part time and I want you to look at that that may explain some of the, some of the difference there. That's the only thing I can tell you. And I just wanted to add that I appreciate you going lead certified. Yeah, that 's really, we're excited about that. In fact, we're leaving next week to be to meet with our architect and that's a lot of what our discussion is around . Go ahead. Go ahead. It does say incorporate green initiatives, and is that just in the building or is that in like the machines and again we're going to see a little more when I get up there. I mean, one of the things right now that we're considering, and again it's cost benefit and I got to look at it but one of the conversations I know I'll have next week it's solar panels across the top. From what I've seen, it makes a lot of sense and the pay back isn't that long. I need my architects to kind of update me and make sure they're telling me the truth on that but it sounds like that's going to be a good idea and it may be something we can add to this building. I'm sure it's a perfect idea. So we're excited about it. One couple of comments. One thing is, is historically these guys have bought trucks from us. So they do buy locally. The other one is is their community support is pretty broad . I think a lot of us recognize that. And as the hours of service for drivers continues to get scrutinized, and their area of territory expands, they're going to have to hire more drivers. Thank you, Jim. Yeah, you're right. Mark. Are most of your employees living in Denton County? Yes, yes. Probably 95%. Maybe 90. I got a few that get in other areas. Are the technical skills that you need for the new system that you're putting in, is that able to be achieved here in town? Yes, yes, for sure. We have some pretty complicated systems with how we go to market, but they're telling me this is easier. So we'll find out. Question. We have you up here. Can you tell me a little bit about the community involvement that the company has? Sure. It's a good question. Because we've been involved in, you know, we're very involved, for example, in the rodeo. We've sponsored that for years. We've done an awful lot of initiatives around the university. We sponsor UNT. We're their lead sponsor. And in fact, next year, I'll be 100% their lead sponsor. I'm going to bring in Dos Equis with Miller Lite, and we'll be their sole sponsor from an athletic standpoint. Listing out all the other events, we've got to, we literally do something, it seems, every week or twice a week around our community. The other side of it that nobody sees from time to time are all the golf tournaments. They call us for the beer, and we give them the beer, and you know, we don't get credit for it, but we just do it. But we are very, very involved in a lot of different things . I know we've got a couple of music festivals coming up this summer that I'm excited about. One in particular is an expanis, a spanish deal that we just sponsored with them. I think it happens right after Jazz Fest. So we're very involved with them and helping that get off the ground and giving them the startup money to get it going. So we try to get back. We really do. Where it makes sense. Thank you. Any more questions during our work session? All right, our work session time is over. We have a long agenda. We're going to thank you very much. We're going to take a break. We have lunch provided in the back. I would like to invite all of our guests to participate in that as well. Then we'll come back and start our regular meeting, which at that time, we will have more discussion and vote or make recommendations on the incentives and wrap up our meetings. Then we will go into our TURS board meeting. And the TURS board meeting should be very short. The agenda is short. So grab some food and I don't mind if we want to eat while we're doing that or if you can eat fast. That's great too. But we'll take a short break to have some lunch. Thank you. The EDP 18-007 consider a recommendation to the city didn't didn't see council regarding approval of the revised policy for tax abatement and incentives. We went over that first. This does not include the PID guidelines. So it's just the update to the tax abatement and incentive policy. The motion by Jill and a second by Carol Anne. Do we have any discussion or any other comments. All those in favor say aye. Any opposed. Motion carries unanimously. As a reminder, these are the recommendations to city council. Next item, EDP 18-008 consider a recommendation to the didn 't city council regarding the approval of the revised public improvement district guidelines. Any comments or questions. I have a question. So the recommendation as included does not include residential opportunities. Is that correct. The proposed revised policy per council direction does not include residential pits. I think it would be a good idea to allow residential with a demonstrated demonstrable. Is there a way we can further discussion. Yes, that's an option. Do we need a motion to table. If we don't make a recommendation to council that doesn't prevent them from moving forward. No, and this this one is not time sensitive like the incentive policy is. So while we want to keep it moving forward. We're not on a hard deadline on this particular PID policy decision. Can we make a recommendation to consider the residential with a an impact and also define demonstrable. Yes, that's possible. We need a vote on that. Well, I think if that's if that's the recommendation that aside, aside from the change you would like to see the council consider adding in the consideration of residential pins and further defining what demonstrable public benefit looks like. And that could be the recommendation that you're okay with everything else but want to add in those things. Or you could just table it. I'm nodding. Do we want to make a recommendation to council that the recommendation couldn't wouldn't include really something that's finite because it's recommended looking into that so I would suggest that we table it with the information to be passed on to council. If everybody agrees we think it's a good idea to look at residential as long as it has a demonstrable public value. If anything, came across industrial commercial whatever was if we can prove something like that I don't know why we wouldn't look at it. I think it's harder if it's residential to prove that you 're going to do that. If something came along. If two or 18 came to town and said we want to do something that might. Maybe that does maybe that doesn't but that might be a good example of something like that. So I'm not do I need to do need to do anything with. That was a table table. Okay, that's a table. I think you do need to go ahead and make someone needs to make a motion to table. I'm like a motion. Motion. And a second. Any more discussion. I think I think the board wants to defer making a recommendation until the council has its further discussion so they're they're tabling making a recommendation today. But then when when I come back to you guys to talk more about kids I can convey the concerns of the board and then we'll just bring it back again. So the vote today is just to table the district. Correct. All those in favor say aye. Aye. Any opposed. Motion carries. All right, we have item number 18. That's 011 recommendation to the density council regarding an incentive for United States cold storage. Anybody want to have any further discussion or make a recommendation for this application. I would make a recommendation to approve an incentive at 25 % for five years with the construction sales tax rebate and the DME energy dollars. Second. Five years. We have a motion and a second. Any further discussion. Yes. So rather than make the recommendation for the six years is listed your recommendation is for five years. Yes. Okay. I'd also like to go on the record to say that even though the the wages that we're looking at doesn't meet the target that the that we're supposed to be looking at. I think overall we would benefit by receiving this company here rather than turning them away. And so as you communicate with your board of directors in London, you can let them know that hopefully the wages will will continue to increase. I understand. I understand. We might need to send a delegation. Any other questions or discussion. Just a comment. I will not be voting in favor. I'm for the staff recommendation and I am glad the company is coming and I'm in favor of you guys coming. But I'm glad that you put five years instead of six that way the energy writer is the same. So there's not any confusion on that. It ends at the same time. But so just with that. I just wanted to go over any further discussion. All right. All those in favor say aye. Aye. All those opposed. We've got six one six to one. Motion carries. Appreciate all the comments and feedback. And I just to tag along to what Caroline said earlier I don 't know if everybody picked up on this. Adam and remind everybody how things kind of work. Adam made contact with the commercial real real estate broker over a year ago. About this project and has helped with the city coordinate about four or five site visits over the past year. So this is a for you new folks and I would say years not necessarily long in the grand scheme of things. This is pretty quick one sometimes. So it started over a year ago. We're just now at this point. So good job by the staff city staff and chamber for bringing this to fruition. Thank you. All right. Consider recommendation to the density council regarding an incentive for Fisher 59. Discussion or comments. No big motion. Or a motion. I make a motion to approve the staff recommendation of construction cells tax rebate 25 percent abatement. I'll second that motion. All right. We've got a motion. And the 25th. Yes. So a total of 131 incentive. We've got a motion and a second for the staff recommendation. Any further discussion or comments. Yes. I'd like to go on record again and say that even though the wages may not meet with the target that we're looking for, I think the Fisher company has a long history here in our area. And it would be hard to go against someone who's made such a significant investment in our community. And it's unlike someone just coming to town. They've got a very strong and I think a very decent history here. And for that reason, I think I can say that I can be in favor of this recommendation. Anybody else. All those in favor say aye. Aye. Any opposed. And carries unanimously and we are through our regular meeting except for the staff reports to the board. So who wants to go first. Sorry. Do you want to have all the information. I think I am of the opinion if Adam agrees with me unless there are specific questions in the interest of time we can forgo discussion of staff presentations. But that's up to you all. Okay. So, in case you didn't notice we had a strange person walking in and sit down at our table here earlier. I mean, people know Michael is with you and the economic development is replacing Tom McCoy on board. So we're happy to have you here. I don't know. Do you want to tell everybody what you do because I wouldn 't do it justice. I'm the AVP of innovation and commercialization. My job is to protect and commercialize intellectual property developed by the faculty and staff and other innovation programs such as developing mentoring students who are building companies and launching them here in the region and other projects as needed by the president or the DPR or anyone else. Great. We're happy to have you on board. Thanks. Happy to be here. All right. Anybody have anything else we need to talk about. You guys are letting me down. It's supposed to remind me about the spring break meeting. Spring break meeting. I was I was baiting you on that. We just wanted just everybody to see how all wise and all knowing you are so we just went to hell. It's like odds. Is anybody else, Keely can't be here spring break and Caroline cannot be here spring break. Can anybody else out of town? Maybe. Looks like we need to postpone that meeting. So to the following Wednesday. That's in March. What day is that Wednesday, March 21 a week later. We are scheduled to have a wait. Sorry. Can we just get staff to double check. I don't get some mobility committee on my schedule that day at 1130. I don't know if that is standing or that is just something on my calendar that hasn't gotten canceled yet. Okay. Because mobility is recorded. So it's in here. Okay. So if we could, I mean, everybody's generally in favor of finding a different date besides the 13th. So 14th will not meet on the 14th. But please keep an eye out for further information about times and locations for the following. Alternative dates. We'll keep we'll shoot for keeping it on the Wednesday, but it's going to depend on available rooms. If you have it in a different room, I can run back and forth. I can vote for her. I'm sure it's her proxy. Well, may determine what kind of we have some staff things to look at that may not be pressing. All right. But do you have anything else for the good of the order? We will adjourn our economic development partnership board meeting and we will move into our tours. Number two board meeting. [BLANK_AUDIO]