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HomeMy WebLinkAbout01-08-07 Special Called Regular Meeting La Porte Development Corporation and City Council Minutes 2 MINUTES OF THE JOINT SPECIAL CALLED MEETING OF THE LA PORTE DEVELOPMENT CORPORATION BOARD OF DIRECTORS AND LA PORTE CITY COUNCIL January 8, 2007 1. Call to Order President Pat Muston and Mayor Alton E. Porter called the meeting to order at 5:04 p. m. Members Present: 4B Development Board - Bill Love, Chuck Engelken, Tommy Moser, Mike Clausen, Ed Matuszak, Pat Muston City Council- Howard Ebow, Chuck Engelken, Tommy Moser, Mike Clausen, Barry Beasley, Peter Griffiths, Mayor Porter, Mike Mosteit, Louis Rigby. Members Absent: None Staff Present: Interim City Manager John Joerns, City Secretary Martha Gillett and Interim Finance Director Michael Dolby, Intern Mike Stokes. Others Present: Paula DiValerio of Economic Alliance. 2. Motion was made by Board Member Engelken to approve the Minutes of December 11. 2006 Joint Special Called Regular Meeting of La Porte Development Corporation Board and City Council. Second by Board Member Matuszak. Motion carried unanimously. Ayes: Bill Love, Ed Matuszak, Pat Muston, Mike Clausen, Chuck Engelken and Tommy Moser. Nays: None Abstain: None Motion was made by Councilman Chuck Engelken to approve the Minutes of December 11, 2006 Joint Special Called Regular Meeting of La Porte Development Corporation Board and City Council. Second by Councilman Ebow. Motion carried unanimously. Ayes: Mike Clausen, Barry Beasley, Peter Griffiths, Chuck Engelken, Howard Ebow, Mike Mosteit, Louis Rigby, Tommy Moser and Mayor Porter. Nays: None Abstain: None 3. La Porte Development Corporation to consider setting a Public Hearing Date of January 22, 2007, for the expenditure of funds related to a new manufacturing center to be established near the intersection of Fairmont Parkway and South Sixteenth Street and zoned light industrial. Motion was made by Board Member Love to set the Public Hearing Date of January 22, 2007 as recommended. Second by Board Member Engelken. Motion carried unanimously. La Porte Development Corporation - 1/0812007 2 Page Ayes: Bill Love, Pat Muston, Ed Matuszak, Mike Clausen, Chuck Engelken and Tommy Moser. Nays: None Abstain: None The board noted they wanted the wording in the public hearing notice expanded to clarify the Public Hearing was for the expenditure of La Porte Development Corporation funds. Staff will make changes to notice prior to publishing. Item 4 was discussed out of order before item 3. 4. Interim Finance Director Michael Dolby provided the board with an overview of current budget and financial report. 5. EXECUTIVE SESSION - PURSUANT TO PROVISION OF THE OPEN MEETINGS LAW, CHAPTER 551.071 THROUGH 551.076, 551-087, TEXAS GOVERNMENT CODE (CONSUL T A TION WITH ATTORNEY, DELIBERATION REGARDING REAL PROPERTY, DELIBERATION REGARDING PROSPECTIVE GIFT OR DONATION, PERSONNEL MATTERS, DELIBERATION REGARDING SECURITY DEVICES, OR EXCLUDING A WITNESS DURING EXAMINATION OF ANOTHER WITNESS IN AN INVESTIGATION, DE LIBERA TION REGARDING ECONOMIC DEVELOPMENT NEGOTIATIONS) A. SECTION - 551-087 - (ECONOMIC DEVELOPMENT) MEET WITH INTERIM CITY MANAGER, CITY CONSULTANT/ADVISOR AND CITY ATTORNEY, REGARDING ECONOMIC DEVELOPMENT (PROJECT AUSTIN POWERS) 8. SECTION - 551-072 - (PROPERTY SALE OR EXCHANGE) MEET WITH INTERIM CITY MANAGER, CITY CONSULTANT/ADVISOR AND CITY ATTORNEY REGARDING CITY/COUNTY HOTEL PROJECT The La Porte Development Corporation and Council retired to Executive Session at 5: 11 p.m. and returned to the Regular Meeting and reconvened at 5 :20 p.m. 6. No action was taken on items considered in executive session. 7. Administrative Reports. It was the consensus of the Board to hold monthly meetings and the next meeting to be held February 12,2007. 8. Board Comments The Board will began meeting monthly beginning January 8, 2007 and the next meeting is to be held on January 22, 2007 for public hearing. Then beginning monthly the board will meet the second Monday of each month prior to the Council meetings at 5:00 p.m. 9. Adjournment La Porte Development Corporation - 1/08/2007 3 Page The meeting was duly adjourned at 5:35 p.m. Respectfully submitted, ~ 2lla~f~ City Secretary TRMC, CMC La Porte Development Corporation Secretary pas1ed. an~d pproved on '. his 22nd day of January, 2007. j ! _J- {r--- j k;{! IW'I~ ~t Muston, President Cliy J oUVLcil to appJtove miVLu.te-o at ill Jtegu1.a.Jt meetiVLg 7/22/2007 hei.d at 6:00 p.m. '3 ---------- -~~~.~..- THE STATE OF TEXAS COUNTY OF HARRIS CITY OF LA PORTE PUBLIC HEARING NOTICE Notice is hereby given that a public hearing of the La Porte Development Corporation will be held at 5:00 p.m. on Monday, January 22, 2006, in the City Hall Council Chambers, 604 West Fairmont Parkway, La Porte, Texas 77571. The Public is invited to attend the public hearing and make comments regarding a proposed project: The board will conduct a Public Hearing for the expenditure of La Porte Development Corporation funds related to the creation of jobs and job training found by the board to be suitable for the development or expansion of manufacturing facilities. The proposed manufacturing center is near the intersection of Fairmont Parkway and South Sixteenth Street and zoned light industrial. Project information is available Monday through Friday from 8:00 a.m. to 5:00 p.m. in the City Secretary's Office, 604 West Fairmont Parkway, La Porte, Texas 77571. If you have any questions, please contact City Manager's office at 281-471-5020. All interested persons are invited to attend and express any comments they have regarding the proposed project and the plan of financial participation relating to the La Porte Development Corporation. A regular meeting of the La Porte Development Corporation will follow the public hearing for the purpose of considering the public hearing item and to conduct other matters pertaining to the Corporation. Citizens wishing to address the Corporation pro or con during the Public Hearing will be required to sign in before the meeting is convened. CITY OF LA PORTE Martha Gillett City Secretary, TRMC, CMC A quorum of City Council members may be present and participate in discussions during this meeting, however, no action will be taken by Council. This facility has disability accommodations available. Requests for accommodations or interpretive services meetings should be made 48 hours prior to the meeting. Please contact the City Secretary's Office at (281) 471-5020 or TDD Line (281) 471-5030 for further information. (. ,.' I. The Sales Tax for Economic Development Public Hearing Requirement for Expending Section 48 Tax Proceeds A Section 48 corporation must hold at least one public hearing on a proposed project, including a proposal to expend funds on maintenance cmd _operating expenses of a project.188 This hearing must be held before the corporation expends any Section 48 funds on th~ project. There is nothing in the Act that prohibits the~Section 48 corporation from holding one public hearing to consider a group of Section 48 projects. After the projects have been considered at a public hearing and 60 days have"passed since the first public notice of the nature of the projects, the development corporation is free to make expenditures related to the projects pursuant to the adopted budget. Public Notice Requirement and the GO-Day Right to Petition ./ The public has a right to gather a petition objecting to a particular Section 48 project.189 The petition must be submitted within 60 days of the first published notice of a specific project or type of project and must be signed by more than 10 percent of the registered voters of the city. State law does not indicate what would constitute the first published notice of a project. A city should ensure that it provides 60 days notice of the specific project or the category of projects. If a petition is pursued by the public, the petition can ask that the city hold an election on the issue before that specific project or type of project is undertaken. If the petition is submitted in a timely manner and an election is required, the corporation may not undertake the project until the voters approve the project at an election on the issue. If the voters disapprove the project at the election, the Section 48 tax proceeds may not be used for that purpose. 0t is important to note that a petition cannot force an election on a project if the voters have .' previously approved the specific project or that general category of projects at an earlier election called under the Act. Cities that know what types of projects they want to "'undertake may be well advised to specifically list each of these types of projects in the ballot wording when the Section 48 tax is first considered by the voters. If the city includes each of these types of projects in the original ballot proposition, it can assert that the public has already approved that type of project at a prior election. In this scenario, the city arguably would not be required to call an additional election even if a petition were submitted regarding the project. Specific Costs of a Section 48 Project That May be Funded Cities must understand what general categories are available for expenditures. They additionally need to know what types of specific expenditures are contemplated within each of these categories. For assistance in understanding what is permitted under the Act, cities should review the definition of the term "cost" under Section 2(4) of the Act. Section 2(4) of the Act defines what costs may be applied to a Section 48 project. It states in pertinent part that costs for a project may include: a) Land and facility improvements: the cost of acquisition. construction, improvement, expansion ofland, buildings, and acquisition of right-of-way. HANDBOOK on ECONOMIC DEVELOPMENT LAWSfor TEXAS CITIES 39 I. The Sales Tax for Economic Development b) Machinery and supplies: the cost of machinery, equipment, inventory, raw materials, and supplies. c) Financial transaction costs: the cost of financing charges, certain interest prior to and during construction, and necessary reserve funds. d) Planning costs: the cost of research and development, engineering and legal services, development of plans and specifications, surveys, and cost estimates; and other expenses necessary or incident to determining the feasibility and practicability of undertaking the project. e) Cleanup costs: the cost of cleaning up contaminated property.190 Nonetheless, a Section 46 corporation may use Section 46 sales tax proceeds to clean up contaminated property only if use of sales tax proceeds for this purpose is approved by the voters in an election called and held for that purpose. The ballot wording that must be used is as follows:191 "The use of sales and use tax proceeds for the cleanup of contaminated property." Due to the definition of the term "project" and of the term "cost" contained in the Development Corporation Act, a strong argument can be made that any expenditure by a Section 46 corporation, other than job training classes, must be related to the acquisition or physical improvement of land, buildings, equipment, or facilities. Of course, an expenditure could also include administrative or planning costs associated with such an acquisition or improvement. Administrative Expenses of a Section 48 Project Section 2 (4) of the Act states that the cost of a project may also include the administrative and other expenses that are incident to placing the project into operation. The law provides that these expenses could include administrative expenses for the acquisition, construction, improvement, expansion, and financing of the project. It is this authority that could be cited for the hiring of administrative staff to implement the work of the Section 48 development corporation with regard to its projects. Accordingly, cities that perform some of the administrative functions for the corporation could cite this authority for reimbursement from Section 46 funds for administrative costs related to projects that city staff oversee. Additionally, Section 48(b) specifically permits a Section 48 corporation to contract with other private corporations to carry out industrial development programs or objectives. Effective June 20, 2003, should a Section 48 corporation contract with a broker, agent or other third party for business recruitment, a written contract approved by the board of directors is required for any payment of a commission, fee, or other thing of value to the third party.192 Failure to enter into a written contract could result in a civil penalty not to exceed $10,000. Additionally, Section 48(a-2) states that the costs of a publicly owned and operated project may include the maintenance and operating costs for the project. The Act, however, allows the voters to object to such an expenditure by submitting a petition of 10 percent of the registered voters of the city. The public has 60 days from the date when notice is first given that the tax will be used for this purpose to submit the petition. Such a petition would ask HANDBOOK on ECONOMIC DEVELOPMENT LAWS/or TEXAS CITIES 40 City of La Porte Project Information Project: Austin Powers This information is to be used for general information purposes only. · This is a project to manufacture tanks and vessels in the City of La Porte · This company will have a central plant and corporate headquarters in La Porte · The City of La Porte is under serious consideration due to our support of the project and the availability of a good location · This project is projected to create approximately 70 skilled technician positions by the end of year 5 of operations · This will be a proposed joint effort from the City of La Porte, La Porte Development Corporation, San Jacinto College. · This project may receive tax abatement or other incentives* · This project is receptive to partnering with the La Porte Development Corporation Pinal decisions on the location will be determined over the next few months. The La Porte Economic Development Board (4B) proposes, to fund up to $50,000 dollars of eligible expenditures allowed by 4B legislation for job creation. The investment is contingent upon the company meeting certain milestones for employment and sales taxes. In return for this investment, the board anticipates a return of approximately $427,500 dollars in sales tax revenue over a ten year period. Mydocuments/austinpowersprojinfo 4