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2010_03.25 EDC Packet
,. AGENDA KENNEDALE ECONOMIC DEVELOPMENT CORPORATION BOARD OF DIRECTORS REGULAR MEETING —MARCH 25, 2010 405 MUNICIPAL DR,—KENNEDALE MUNICIPAL BLDG. COUNCIL CHAMBERS 7:15 PM I. CALL TO ORDER II. ROLL CALL III. REGULAR ITEMS A. Review and consider action to approve regular meeting minutes dated February 16, 2010. B. Review KEDC Financial Reports. C. Review and consider action to approve Independent Audit Report for year ended September 30,2009. D. Review and consider financial incentive to MasTec to open a distribution office in Kennedale. E. Review and consider action to change date and time of future meetings—April 13t°'. IV. STAFF ANNOUNCEMENTS/REPORTS A. KEDC Executive Director Announcement/Reports 1. Agreement with the United States Fallen Hcrocs Memorial Foundation, 2. TownCenter ground breaking—April 20'at 10:00 AM 3. Board Appreciation Dinner—April 29"'at 6:30 PM B. Orasi Development Report V. PRESIDENT/BOARD ANNOUNCEMENTS/REPORTS A. President Announcements/Reports 1. Report agenda items to be posted for future meetings—April 13`x` Page 1 of 2 VI. EXECUTIVE SESSION A. The Economic Development Corporation will meet in closed session pursuant to Section 551.087 of the Texas Government Code to deliberate the offer of a financial or other incentive to a business prospect with which the city is conducting economic development negotiations. 1, Fallen Heroes Monument 2. 1000 E. Kennedale Parkway 3. 5500 W. Kennedale Parkway VII. RECONVENE INTO OPEN SESSION AND TAKE ACTION PURSUANT TO EXECUTIVE SESSION, IF NECESSARY. A. Consider action on 5500 W. Kennedale Parkway. VIII. ADJOURNMENT Page 2 of 2 CITY OF KENNEDALE, TEXAS OFFICE OF THE CITY SECRETARY KEDC ROLL CALL DATE: MARCH 25,2010 START TIME: . 1 PM END TIME: PM ROLL CALL: PRESENT ABSENT PRESIDENT ROBERT MUNDY--P4 BOARD OF DIRECTOR BEVERLY HAYES-P3 BOARD OF DIRECTOR DARRELL ERWIN-PI BOARD OF DIRECTOR DOU G PARKER-P2 VICE-PRESIDENT DONNIE GRAHAM-P5 BOARD OF DIRECTOR MARK YEARY-PG BOARD OF DIRECTOR REBECCA MOWELL-P 7 I CITY STAFF PRESENT: PRESENT ABSENT CITY MANAGER BOB HART CITY SECRETARY KATHY TURNER SAKURA M.DEDRICK DIR.OF FINANCE y Staff Report To KEDC Board of Directors Date: March 19, 2010 Agenda item No: I11-A Subject: Review and consider approval of meeting minutes. Originated by: Kathy Turner, KEDC Secretary Summary: A draft copy of the meeting minutes dated February 16, 2010 is attached for your review and consideration, Recommendation: Recommend Approval. Disposition by KEDC Board of Directors: 328 MINUTES KENNEDALE ECONOMIC DI&OPMENT CORPORATION BOARD CTORS REGULAR I FEBRUARY 16,2010 405 MUNICIPAL D MUNICIPAL BLDG. COUNCIL CHAMBERS I. CALL TO ORDER President Mundy called the meeting to order at 7:15 p.m. II, ROLL CALL Kathy Turner, Secretary called roll with the following board members present/absent: Present: Robert Mundy President Donnie Graham Vice-President Doug Parker Board Member Beverly Hayes Board Member Mark Yeary Board Member Rebecca Mowell Board Member Darrell Erwin Board Member 1 Staff members present included: Bob Hark Executive Director Kathy Turner Secretary Jack Thompson Orasi Development—Contract Provider III. REGULAR ITEMS A. Review and consider action to approve regular meeting minutes dated January 19, 2010. Rebecca Mowell moved to approve the regular meeting minutes dated January 19, 2010, second by Marl-, Yeary. Mowell, Yeary, Mundy, Graham, Parker, and Erwin voted aye, while Hayes abstained due to absence from meeting. Motion carried (6- 0-1). B. Review KEDC Financial Reports, Bob Hark, Executive Director provided the board with a sales tax summary and entertained questions from the board. Darrell Erwin moved to approve the December 2009 Financial Reports, second by Rebecca Mowell. Motion carried unanimously (7-0). 329 C. Review and consider action to submit Petition to the TDD, Planning and Zoning Commission, and City Council requesting a portion of Municipal Drive be vacated and closed. Donnie Graham moved to authorize President Mundy to execute Petition to close a portion of Municipal Drive, and forward a recommendation to the various boards for approval, second by Mark Yeary. Motion carried unanimously (7-0). D. Review and consider approval of agreement with the City of Kennedale providing for the transfer of proceeds from the Sale of Certificate of Obligations, Series 2010 for construction of TownCenter Improvements. Darrell Erwin moved to authorize President Mundy to execute agreement with the City providing for the transfer of proceeds from the Sale of Certificate of Obligations, Series 2010 for construction of the TownCenter Improvements, second by Donnie Graham. Motion carried unanimously (7-0). E. Review and consider action to approve Agreement between Kennedale Economic Development Corporation and Kennedale TownCenter Development District. Rebecca Mowell moved to authorize Bob Hart, Executive Director to sign Agreement between the KennedaIe Economic Development Corporation and the Kennedale TownCenter Development District, second by Darrell Erwin. Motion carried unanimously (7-0). F. Review and consider action to authorize President to execute the Ground Lease for development of the Kennedale TownCenter. Darrell Erwin moved to authorize President Mundy to execute the Ground Lease for development of the Kennedale TownCenter subject to minor changes as determined by both parties legal counsel. Motion seconded by Doug Parker with all members voting in favor. Motion carried unanimously(7-0). G. Review and consider action to approve Economic Development Agreement for Development of Kennedale TownCenter. Rebecca Mowell moved to authorize President Mundy to execute Economic Development Agreement for development of Kennedale TownCenter subject to minor changes as determined by both parties legal counsel, second by Mark Yeary. Motion carried unanimously(7-0). 330 H. Review and consider action to authorize President to execute a Management Lease for Management of the Kennedale TownCenter. Bob Hart, Executive Director indicated that he was not prepared to bring Management Lease for Management of the Kennedale TownCenter forward at this time; therefore, no action was taken on this item. I. Review and consider action to approve Economic Development Project Agreement with United States Fallen Heroes Memorial Foundation. Bob Hart, Executive Director reported that work was continuing with the United States Fallen Heroes Memorial Foundation to secure the location of their planned memorial in Kennedale, and indicated that the EDC would retain the title to the property until such time that the memorial had been built and is ready to be conveyed to the National Park Service. Furthermore, he advised that legal counsel is finalizing the agreement and he would bring back before the board during their March meeting. J. Review and consider action to change date and time of future meetings. After a brief discussion, it was suggested to schedule the next EDC meeting to Thursday, March 25, 2010 to allow time for finalization of the Contract for improvements to the TownCenter. IV. STAFF ANNOUNCEMENTS/REPORTS A. KEDC Executive Director Announcement/Reports 1. Industrial activity • 1000 E. Kennedale Parkway—Bob Hart, Executive Director indicated that an appraisal has been completed on the building and works are in place to sell to a potential buyer. 0 705 W. Kennedale Parkway -- Bob Hart, Executive Director advised that talks have been taken place with a potential business in regards to locating into this building, in which business is a distribution center for satellite dishes. 2. Kennedale TownCenter activity David Johnson, President of Cypress Properties and TownCenter Developer invited all to attend the Chamber Luncheon on February 17, 2010, as he would be providing an update on the development of the TownCenter. 331 • 9-1-1 Monument — Bob Hart, Executive Director mentioned that the City was going to approach FWT, Inc. in regards to assistance with the 9111 memorial. • Section House—Bob Hart, Executive Director indicated that plans were to move the Section House into the TownCenter prior to concrete work commencing, and restoration to begin in August. Additionally, a fund raiser is planned to help raise money from the community to assist with the project. Furthermore, Hail said the Union Pacific Railroad Foundation provided $2,500 and were willing to provide additional artifacts to go inside the building. And, an Architectural Agreement in regards to the Section House would be scheduled before the EDC at the next scheduled meeting. 3. 16"Water Line Extension • Water/Sewer extension for QT — Bob Hart, Executive Director indicated that City Council awarded the bid to extend water/sewer line improvements during their February 11 meeting. 4. Oak, Crest Development - Bob Hart, Executive Director advised that UTA students would be working with the City to formulate a redevelopment plan for the area, addressed real estate opportunities within the area, and indicated that there may be a need for a Phase I or II study. B. Orasi Development Report — Jack Thompson, KEDC Contract Provider indicated that the City was awarded the Sustainabiiity Infrastructure Grant, and thanked Rachel Roberts, Planner for the City in her efforts in completion of the grant. He also said he was busy supporting Bob and keeping up with potential developments. V. PRESIDENT/BOARD ANNOUNCEMENTS/REPORTS A. President Announcements/Reports 1. Report agenda items to be posted for future meetings. No additional items were noted to be posted for future meetings. VI. ADJOURNMENT There being no further discussion, President Mundy asked for a motion to adjourn. Rebecca Mowell so moved and Darrell Erwin seconded the motion with all members present voting in favor. Motion carried(7-0). Meeting adjourned at 9:00 p.m. ATTEST: APPROVED: Kathy Turner, EDC Secretary President,Robert Mundy taff Report To the Members of the EDC4B Board Date; March 25, 2010 Agenda Item No: 111.0 Subject: DISCUSS AND REVIEW JANUARY 2010 EDC FINANCIALS Originated by: Sakura Moten-Dedrick Summary: Budget/Amendment N/A Year-To-Date • SaleS Tax: Revenues are lower this year in comparison to last year. The EDC has experienced approximately a 7% loss for the month of Jan compared to Jan of last year,and a 21% loss year- to-date compared to this same time last year due to the slowing of the economy (see Monthly Graph, 3-Year Historical Graph, 10-Year Historical Data). • Investment Earnings: Due to declining interest rates, revenues continue to be much lower compared to this same time last year. • Surplus Sales/Rentals: Rental fees are lower this year in comparison to last year. Due to the transition from Quine to Cypress, it has taken several months to organize and get all revenues posted; however, we are now back to normal operations. January's financials include checks received only for the months of Oct/Nov, but taking into account revenue recently received for Dec/Jan, we would actually be at approximately $61K through Jan, which is equivalent to this same time last year. On another note, $10000 was originally designated by Cypress as a standard operating balance during the initial transition, and last month, staff requested that David decrease this balance to $2500. However, given fiulher conversations with David, staff has since determined that the higher amount is in fact more sufficient given the level of activity which is planned over the next year. The standard operating balance will remain at $10000 (see FY09-10 Cypress History For Kennedale Town Shopping Center). • Personnel: EDC Director position was eliminated a few months into last year, and this is why no expenses are reflected in the current month. • Supplies: Increase in expenses over this time last year. Approximately $6K was expensed for aerial maps in Oct 09. • Maintenance: Increase in expenses over this time last year. Additional expenses tied to on Town Center. • Sundry: Decrease in expenses over this time last year. Last year included costs tied to Town Center Plaza. Current expenses include contract payments to Orasi (Special Services) and Admin Charges transferred to the General Fund on a monthly basis. • Debt: No significant change. The board amended the budget in anticipation of a $25K interest only payment on the $2M CO Bond. The actual payment will be $26540 and is due 05/0112010. Following payments will occur every Nov ($40K interest only) and May ($75K principal plus $40K interest). �' • Transfers: No significant change. The bond proceeds were just received on Feb 10 and given that the EDC will be transferring/reimbursing the General Fund for bond payments, please note the addition of a Transfer Out to the Debt Service Fund. • Capital: Increase in expenses over this time last year. Approximately $94K was for roofing repairs to Subway in Nov 09 and Dee 09 (directly offset by insurance reimbursement proceeds received in the prior fiscal year). /o5s 1gr � � CITY OF KENNEDALE,TEXAS ANNUAL PROGRAM OF SERVICES INCOME STATEMENT IS:EDC4B FUND FY08.09 FYOS-09 FY08-09 FY08.09 FY09-10 FY09-TO FY09-10 FY09-10 INCOME STATEMENT BUDGET AMENDED YTD JAN ESTIMATE PROPOSED AMENDED YTD JAN ESTIMATE OPERATING REVENUES 532,211 532,211 109,982 1,017,337 567,171 528,615 62,995 481,467 OPERATING EXPENDITURES (1,040,207) (1,040,207) (210,709) (533,788) (1,098,495) (1,631,544) (218,174) (1,633,079) OPERATING INCOME/(LOSS) (507,996) (507396) (100,727) 483,549 (531,324) (1,102,925) (155,180) (1,151,612) NONOPERATING REVENUES/(EXPENSES) INTEREST EARNINGS 50,000 50,000 5,522 9,691 20,000 20,000 793 3,000 TRANSFERS IN - - - - - - - - (TRANSFFR OUT) - 10,000 26,000 - 27,540 NET OPERATING INCOME/(LOSS) (457,996) (457,996) (95,205) 493,241 (501,324) (1,056,925) (154,387) (1,121,073) BEGINNING FUND BALANCE $1,097,354 $1,097,354 $1,097,354 $1,097,354 $ 1,590,594 $1,590,594 $1,590,594 $1,590,$94 ENDING FUND BALANCE(EXCLUDING FUND 95) $ 639,358 $ 639,358 $1,002,148 $1,590,594 $1,079,270 $ 507,670 $1,436,207 $ 441,982 95:EDC48 RESERVE FUND $ 118,482 $ 118,482 $ 118,482 $ 118,482 $ 119,382 $ 119,382 $ 119,382 $ 119,382 ENDING FUND BALANCE(INCLUDING FUND 95) $ 757,840 $ 757,840 $1,120,630 $1,709,076 $1,198,652 $ 627,052 $1,555,589 $ 561,364 "EXEMPLIFYING EXCELLENCE" CITY OF KENNEDALE,TEXAS ANNUAL PROGRAM OF SERVICES FUND SUMMARY BY CATEGORY 15:EDC4B FUND FY08-09 FY08-09 FY08.09 FY08-09 FY09-10 FY09-10 FY09-10 FY09-10 YTD CATEGORY BUDGET AMENDED YTD JAN ESTIMATE PROPOSED AMENDED YTD JAN ESTIMATE PERCENT BEGINNING FUND BALANCE $1,047,354 $1,097,354 $1,097,354 $1,097,354 $1,590,594 $ 1,590,594 $1,590,594 $ 1,590,594 AD VALOREM TAXES - - - - - - - - 0.0% SALES/BEVERAGE TAXES 357,011 357,011 49,863 298,682 323,571 323,571 36,699 276,423 11.3% INVESTMENT EARNINGS 50,000 50,000 5,522 9,691 20,000 20,000 793 3,000 4.0% MISCELLANEOUS INCOME - - - 481,136 - - - - 0.070 SURPLUS SALES/RENTALS 175,200 175,200 60,119 237,518 243,600 205,044 26,296 205,044 12,8% TOTAL REVENUES $ 582,211 $ 582,211 $ 115,504 $1,027,029 $ 587,171 $ 548,615 $ 63,787 $ 484,467 11.670 PERSONNEL 108,109 108,109 33,827 37,549 - - - - 0.0% SUPPLIES 29,300 29,300 2,615 9,401 33,860 28,860 8,448 28,860 29.3% MAINTENANCE 22,680 22,680 3,838 23,757 23,790 23,790 8,518 23,790 35.8% SUNDRY 572,801 572,801 129,778 315,354 417,537 1,024,582 67,374 1,024,582 6.6% DEBT 212,317 212,317 40,652 147,726 164,230 114,230 39,534 114,230 34.6% TRANSFERS - - - - 10,000 26,000 - 27,540 0.0% CAPITAL 95,000 95,000 - - 449,078 414,078 94,300 414,078 22.8% TOTAL EXPENDITURES $1,040,207 $1,040,207 $ 210,709 $ 533,788 $1,098,495 $ 1,631,540 $ 218,174 $ 1,633,079 13.4% REVENUES OVER EXPENDITURES $ )457,996) $ (457,996) $ [95,205) $ 493,241 $ (511,324) $(1,082,925) $ (154,387) $(1,148,612) 143% "LADING FUND BALANCE $ 639,358 $ 639,358 $1,002,148 $1,590,594 $1,079,270 $ 507,670 $1,436,207 $ 441,982 3JUSTMENTS "EXEMPLIFYING EXCELLENCE" CIFY OF KENNEDALE,TEXAS ANNUAL PROGRAM OF SERVICES REVENUE LINE ITEM SUMMARY 15:EDC48 FUND FY08-09 FY08.09 FY08.09 FY08-09 PY09-10 FY09-10 FY09-10 FY09-10 YTD ACCOUNT ACCOUNT NAME BUDGET AMENDED YTD JAN ESTIMATE PROPOSED AMENDED YTD JAN ESTIMATE PERCENT 4001-00-00 PROPERTY TAX-CURRENT YEAR 0.07. 4002-00-00 ASSESSMENTS-CURRENT YEAR 0,0% AD VALOREM TAXES $ - $ - $ $ $ $ $ $ 0.0%m 4081-00-00 SALES TAX 354,000 354,000 49,863 298,682 323,571 323,571 36,699 276,423 11.3% 4082-00-00 MIXED BEVERAGE TAX 3,011 3,011 - - - - -- - 0.0% SALES/BEVERAGE TAXES $357,011 $ 357,011 $ 49,863 $ 298,682 $ 323,571 $ 323,571 $ 36,699 $ 276,423 11.37. 4401-0000 INVESTMENT INCOME 50,000 50,000 5,522 9,691 20,000 20,000 793 3,000 4.0% INVESTMENT EARNINGS $ 50,000 $ 50,000 $ 5,522 $ 9,691 $ 20,000 $ 20,000 $ 793 $ 3,000 4.0% 4409-00-00 MISCELLANEOUS INCOME - - - 127,058 - - - _ 0.070 4415-00-00 INSURANCE REIMBURSEMENT 354,078 0.0% MISCELLANEOUS INCOME $ $ $ $ 481,136 $ - $ - $ $ - 0.0% 4805-00-00 RENTAL FEES-SHOPPING CENTER 175,200 175,200 60,119 237,518 243,600 205,044 26,296 205,044 12.8% 4806-00-00 RENTAL INSURANCE - - - - - - - - 0.0% SURPLUS SALES/RENTALS $175,200 $ 175,200 $ 60,119 $ 237,518 $ 243,600 $ 205,044 $ 26,296 $ 205,044 12.8% TOTALREVENUES $582,211 $ 582,211 $ 115,504 $1,027,029 $ 587,171 $ 548,615 $ 63,787 $ 484,467 11.67. TOTAL REVENUES(EXCLUDING INTEREST/TRANSFERS) $ 663,259 $ 567,171 $ 528,615 $ 62,995 $ 481,467 10%ADMIN CHARGE-GENFRAL FUND 66,326 56,717 52,862 6,299 48,147 "EXEMPLIFYING EXCELLENCE" CL w V) IL � Q d U Q O r- J � � O � O }N X N S a O Q u } O o ` = co O o Ua) N >- E w Q U- O QJ M d u d O = U u O LU d u o o W n O O N <1* a CD z O CD 4 O Q O O O O O O © C O O ui 4 LO 0 Sri T co co N N 619- 69- 1-0� +:O� 69- v cm LU w M 0 co 0 Cli J J O Q (t7 � Al � W N z Q W � M N H � VI C-4 H � � p Q Q O Z9 00 O — Q L � � L!J O © LO p tn U Lq _ a ti Qy cn co EN co O C.>- C3 Q LL W O Z r N W �. � � h m o w O cq u w co a � N O Z U C O N O O O O O O O O O LO Q u7 O u7 co c7 N N e9� b� 61:� bl� Z4 W W r h N to O N M '�} W O h ((] o G � t0 00 r O h r N QI CT r O r O 00 T' QMCl rMON r+- P7I Ol (A h w W 'd' w D6 It h vhC, hm (3 r N r r N r r N r r N r r N Ul N W a a e a n a a a a e a a r M N O t() t(7 O W! r N r l 0i r tD N 61 h � M N O U1 � Ur rN CR1 CV �- r " Z to a o v o o e e e 4 a fl e Fl; 00 Oo M tC o q o C7 o 0 p ;: rnmwNtri000aoo � MtAh Mh � N Z0 lx tOq- t M Q Q N t"r r.� G � tMD tlm' ShD tmD V�' (hAm � CrhN r � (17 (170r (17 (17r0 (D40rd' to mO (t) M r- to W mt700 N (D G r V SD 00 0Y r --' r N N N N N J (000h NRd (0o C00 Q (cO V N00 < C:, V MO [D00 (�l�(DN 'd' 00 (7)1- t90 to V 00 N O r° h Ce) 'q CD GS 8 V T Nr '�-' Nr N t'7 N r (1) N N ' N Q f N M M d M (D (D 00 (D �r (() �t a O W O Mm Cl) (n (DM O O O to Nt � O r U) dhd 't 117 d (000 (D at tt) N [� O CD Q, NM0 ° M .h- N0 Cl) NC ° op M N w 0. JO M m CO LO (D M O d O ((0 '1 '1 QOhd et -1 d (D OD CO m (DC' hr = NMo O Q) MN C3 M V w` tf V N M M M � N M Cl) N 0 N (y Q Q 40000 h m dr 00 (II Iti (n V' CD d} 40 J 00 'd' M h M M co h 00 r m M (C! � c � QOO IQ CD OC gNN Iii(13 V ([S N (! L; h X O U 0 M D t 11 0 CO M M N M N M M N M C 7 N N N N N ri CG N Q ca tll mmh r-. C%4 �T Mh00ra ddMLO mhm (3) h V' MNN U) 9 t- r M h m (D m et M 'd_r to w � (0 M (0 m (D (n N (0 1- 00 0 47 M oUN V' N NNr N Cl) NNNMM ' N Q J 0) OOh � N h MUDS m 000 (4 It 00 QQ � NM V COmd 00 (ONmMM (13 Lh 0.mgmko v(nr-v (nr;svr NU M co N N M N N CK1 N N M N M Q J O r- O >• NCND VM W3 �--' WNtih co 'Q 00 (1 r+ -C MmMdmN (D 000 � r- MMNCO _ CO V MV NN(CY Q U N N N N CO N N M N N CO N M ' N Q M as N m V ((0 ((0 N 000 N (hD rO W) Q Q r� -C 'd m h 'ct 'd' 00 m h h - ("`> = (D M (0 Y(17 N CO to CO 11) O In M(n OC.INMN NMNNMMNMNM th N Q Z d LO r m 00r MLO (D CO W CD Lo MJrr m m M co M co to d r- (D v d N Q Q d lf5 M r 00 M m tD M O (O N 117 't MMN M0 (4N W)N M (l1 N Q U N M N N M N N M N N co N N ' d N Q O V (D co M V 00 (D t (t) d m (tl m w m N W CO (D CO d r IT O m V 0 m C7 CO Z QQmd (A OO -- eq- mMNM OOr4 1170000 CO to 't CO O N 't 'z-' M�3 C co, V N M N N M N N co N N co N M ' d N Q 0 ,0 W <> "'r NO 0) ; tW LD ROD (A Cl) M W 0�] r Co 00 01 W4 Q I(7 h m M r "t 117 I:t d d M (D M (O cl V X O U N CO N N M N N V N N M N M r � N Q ow Z W LUW 0zo -iLL2 < � � auwi CYPRESS HISTORY FOR KENNEDALE TOWN SHOPPING CENTER FY2009-2010 ACCOUNT OCT NOV DEC JAN .: TOTAL INCOME Rental Income $ 16,568.00 $ 16,568.00 $ 16,565.00 $ 16,568.00 $ 82,840.00 Tax Escrows $ 1,696.00 $ 1,696.00 $ 1,669.00 $ 1,669.00 $ 8,399.00 Insurance Escrows $ 115.00 $ 115.00 $ 142.00 $ 142.00 $ 656.00 CAM Escrows $ 1,040.00 $ 1,040.00 $ 1,040.00 $ 1,040.00 $ 5,200.00 Security Deposit $ - $ - $ 2,957.00 $ - $ 2,957.00 TOTAL INCOME $ 19,419.00 $ 19,419.00 $ 22,376.00 $ 19,419.00 $ 100,052.00 EXPENSES General &Admin $ - $ - $ - $ - $ - Property Mgmt $ (776.76) $ (776.76) $ (500.00) $ (500.00) $ (3,053.52) Office Expenses $ - $ - $ - $ - $ - Bank Charges $ - $ - $ - $ - $ - Rental Commissions $ - $ (3,696.00) $ - $ - $ (3,696.00) Electricity $ (224.56) $ (197.99) $ (394.46) $ (519.52) $ (1,336.53) Sweeping $ (300.00) $ (600.00) $ (300.00) $ - $ (1,500.00) Porter service $ (90.00) $ - $ - $ - $ (90.00) Landscape $ (320.00) $ (640.00) $ (320.00) $ - $ (1,600.00) Fire Sprinkler/Alarm $ (150.00) $ - $ - $ - $ (150.00) Hard Surface Repair $ - $ - $ - $ - $ - Asphalt $ - $ - $ - $ - $ - Eiec Supplies $ (60.39) $ (514.86) $ - $ - $ (575.25) Mntc Supplies $ - $ - $ - $ - $ - Roofing Repair $ (625.38) $ - $ - $ - $ (625.38) R&M $ - $ - $ - $ - $ - TOTAL EXPENSES $ (2,547.09) $ (6,425.61) $ (1,514.46) $ (1,019.52) $ (12,626.68) ADJUSTMENTS Operating Balance $ - $ - $ (10,000.00) $ - $ (10,000.00) TOTAL ADJUSTMENTS $ - $ - $ (10,000.00) $ - $ (10,000.00) NET PROFIT/(LOSS)-CHECK $ 16,871.91 $ 12,993.39 $ 10,861.54 $ 18,399.48 $ 77,425.32 Total Rental Income Posted $ 19,419.00 $ 6,876.69 $ 17,608.00 $ 17,608.00 $ 79,119.69 CITY OF KENNEDALE,TEXAS ANNUAL PROGRAM OF SERVICES EXPENDITURE LINE ITEM SUMMARY I5:EDC4B FUND 01:ADMINISTRATION FY08-09 FY08-09 FYOB-09 PY08-09 FY09-10 FY09-10 FY09.10 FY09-10 YTD ACCOUNT ACCOUNT NAME BUDGET AMENDED YTD JAN ESTIMATE PROPOSED AMENDED YTD JAN ESTIMATE PERCENT 5101-01-00 SALARIES 77,690 77,690 24,942 32,502 0.07. 5107-01-00 OVERTIME 3,000 3,000 - - 0.0% 5111-01-00 AUTO ALLOWANCE 4,800 4,800 1,278 1,278 0.0% 5114-01-00 LONGEVITY - - 184 184 0107o 5115-01-00 RETIREMENT 9,344 9,344 3,044 3,871 0.0% 5116-01--00 UNEMPLOYMENT INSURANCE - - 108 108 0.0% 5117-01-00 FICA 6,540 6,540 2,020 2,598 - 0.0% 5118-01-00 MEDICAL INSURANCE 6,000 6,000 2,071 2,071 0.07. 5120-01-00 LIFE INSURANCE 255 255 58 58 - 0.0% 5121-01-00 DENTAL INSURANCE 360 360 95 95 0.0% 5122-01-00 VISION INSURANCE 120 120 29 29 0.0% 5190-01-00 VACATION/SICKITFRM/LEAVE ADJ - - - (5,2431 0.0% PERSONNEL $108,109 $ 108,109 $ 33,827 $ 37,549 $ $ $ $ 0.0% 5220-01-00 UNIFORMS 600 600 - - 300 300 300 0.0% 5240-01-00 PRINTED SUPPLIES 14,000 14,000 1,253 4,449 25,000 22,000 7,80D 22,000 35.5% 5260-01-00 GENERAL OFFICE SUPPLIES 1,500 1,500 254 332 500 500 23 500 4.7% 5261-01-00 POSTAGE 1,000 1,000 119 128 11000 500 - 500 0.0% 5280-01-00 MINOR EQU IP/SMALL TOOLS<$5K 3,000 3,000 - - 1,000 - - 0.0% 5290-01-00 EXPENDABLE SUPPLIES 1,500 1,500 169 1,023 1,500 1,000 - 1,000 0.0%A SUPPLIES $ 21.600 $ 21,600 $ 1,796 $ 5,932 $ 29,300 $ 24,300 $ 7,823 $ 24,300 32.2% 5403-01-00 BUILDING MAINTFNANCE - - - - - - - 0.0% 5440-01-00 OFFICE EQUIP/SOFTWAREMAI NT 1,000 1,000 0.0% MAINTENANCE $ 1,000 $ 1,000 $ $ $ $ $ $ 0.017. 5501-01-00 ADVERTISING 18,000 18,000 164 789 11,000 5,000 343 5,000 6.9% 5510-01-00 ASSOC DUES/PUBLICATIONS 1,400 1,400 237 334 1,000 200 - 200 0.0% 5512-01-00 CONTRACTUAL SERVICES 300,500 130,000 117,685 121,854 - - - 0.07. 5525-01-00 TRAINING/SEMINARS 2,800 2,800 - 430 2,500 1,000 - 11000 0.01/. 5565-01-00 LEGAL SERVICES 25,000 25,000 3,504 27,340 40,000 40,000 11,359 40,000 28.4% 5567-01-00 AUDIT SERVICES 31000 3,000 3,000 3,000 4,000 4,000 1,500 4,000 37.5% 5569-01-00 IT SUPPORT - - - - - - - - 0.0% 5570-01-00 SPECIAL SERVICES 90,000 85,500 1,331 27,870 78320 103,420 25,646 103,420 24.87. 5575-01-00 EQUIPMENT RENTAL 11000 1,000 - - - - - - 0.01. 5578-01-00 TRAVEL 7,450 7,450 174 284 6,000 700 15 700 2.2% 5580-01-00 ENGINEERING SERVICES 25,000 - - - - - 0.0% 5585-01-00 TELEPHONE SERVICES 600 600 86 294 - - 0.0% 5595-01-00 ADMIN CHARGE-GENERAL FUND 53,221 53,221 - 66,326 56,717 52,862 9,163 52,862 17.3% SUNDRY $527,971 $ 327,971 $126,181 $ 248,521 $ 200,137 $ 207,182 $ 48,026 $ 207,182 23.2% 5610-01-00 VISUAL GRANT 100,000 100,000 - 36,417 50,000 - - - 010% 5615-01-00 FUNCTIONAL GRANT I i - - 0.07. 5625-01-00 ISSUANCE COST - - - - 0.0% DEBT $100,001 $ 100,001 $ $ 36,417 $ 50,000 $ $ $ 0.0% 5701-01-00 TRANSFER OUT-GENERAL FUND - - 10,000 11000 1,000 0.01% 571401-00 TRANSFFR OUT-DEDICATION FUND - - - 0.0% 5795-01-00 TRANSFER OUT-EDC RESERVE FUND - - - 0.0% TRANSFERS $ - $ $ $ $ 10,000 $ 1,000 $ $ 11000 0.07. 5800-01-00 LAND 25,000 25,000 25,000 - - 0.07. 5813-01-00 KENNEDALE ENTRANCE SIGN 45,000 45,000 45,000 45,000 45,000 0.0% 5820-01-00 BUILDING IMPROVEMENT 25,000 25,000 379,078 369,078 94,300 369,078 25.61% CAPITAL $ 95,000 $ 95,000 $ $ $ 449,078 $ 414,078 $ 94,300 $ 414,078 22.8% TOTAL EXPENDITURES $853,681 $ 653,681 $161,804 $ 328,419 $ 738,515 $ 646,560 $150,149 $ 646,560 23.2% "EXEMPLIFYING EXCEIIENCE" CRY OF KENNEDALE,TEXAS ANNUAL PROGRAM OF SERVICES EXPENDITURE LINE REM SUMMARY 1S:EDC48.FUND 01:ADMINISTRATION 03:DEBT SERVICE FY0S-09 FY08.09 FY08.09 FY08.09 FY09-10 FY09.10 FY09-10 FY09.10 YID ACCOUNT ACCOUNT NAME BUDGET AMENDED YTD JAN ESTIMATE PROPOSED AMENDED YTD JAN ESTIMATE PERCENT 5620-01-03 ISSUANCE COSTS - 0.0% 5621-01-03 PAYING AGENT FEES 1,000 1,000 0.0% 5643-01-03 2007$1.2M TAX BOND-INTEREST 81,316 81,316 40,652 81,309 79,230 79,230 39,534 79,230 49.9% 5643-01-03 2007$1.2M TAX BOND-INTEREST 30,000 30,000 - 30,000 35,000 35,000 - 35,000 0.0% DEBT $112,316 $ 112,316 $ 40,652 $ 111,309 $ 114,230 $ 114,230 $ 39,534 $ 114,230 34.6% 5702-01-03 TRANSFER OUT-DEBT SERVICE FUND - - - - - 25,000 - 26,540 0.0% TRANSFER $ - $ - $ - $ - $ $ 25,000 $ - $ 26,540 0.0% TOTAL EXPENDITURES $112,316 $ 112,316 $ 40,652 $ 111,309 $ 114,230 $ 139,230 $ 39,534 $ 140,770 28.4% "EXEMPLIFYING EXCELLENCE" CITY OF KENNEDALE,TEXAS ANNUAL PROGRAM OF SERVICES EXPENDITURE LINE ITEM SUMMARY 15:EDC413 FUND 02:TOWN SHOPPING CENTER FYOB-09 FYOB-09 FYOB-09 FY08.09 FY09-10 FY09-10 FY09-10 FY09-10 YTD ACCOUNT ACCOUNT NAME BUDGET AMENDED YTD JAN ESTIMATE PROPOSED AMENDED YTD JAN ESTIMATE PERCENT 5280-02-00 MINOR EQUIPISMALL TOOLS<$5K 7,700 7,700 820 3,469 4,560 4,560 625 4,560 13.7% SUPPLIES $ 7,700 $ 7,700 $ 820 $ 3,469 $ 4,560 $ 4,560 $ 625 $ 4,560 13.7% 5403-02-00 BUILDING MAINTENANCE 21,680 21,680 3,838 23,757 23,790 23,790 8,518 23,790 35.87. MAINTENANCE $ 21,680 $ 21,680 $ 3,838 $ 23,757 $ 23,790 $ 23,790 $ 8,518 $ 23,790 35.87. 5501-02-00 ADVERTISING 1,000 1,000 - - - - - - 0.0% 5510-02-00 ASSOC DUES/PUBLICATIONS 1,230 1,230 - - 0.0% 5512-02-00 CONTRACTUAL SERVICES 14,800 14,800 2,468 16,770 QO% 5530-02-00 ELECTRIC SERVICES 6,100 6,100 1,153 4,122 7,800 7,800 555 7,800 7.17o 5545-02-00 INSURANCE-PROPERTY 20,900 20,900 - - - - - - 0.0% 5565-02-00 LEGAL SERVICES - - - - - - - - 0.0% 5570-02-00 SPECIAL SERVICES 800 800 (25) (25) 9,600 9,600 5,103 9,600 53.27o SUNDRY $ 44,830 $ 44,830 $ 3,596 $ 20,868 $ 17,400 $ 17,400 $ 5,657 $ 17,400 32,57. TOTAL EXPENDITURES $ 74,210 $ 74,210 $ 8,253 $ 48,094 $ 45,750 $ 45,750 $ 14,800 $ 45,750 32,47o "EXEMPLIFYING EXCELLENCE" CITY OF KENNEAALE,TEXAS ANNUAL PROGRAM OF SERVICES EXPENDITURE LINE ITEM SUMMARY 15;EDC46 FUND 03:TOWN CENTER REDEVELOPMENT FYOS-09 FYUB-09 FY08.09 FYOB-09 FY09-10 FY09.10 FY09.10 FY09.10 YID ACCOUNT ACCOUNT NAME BUDGET AMENDED YTD JAN ESTIMATE PROPOSED AMENDED YTD JAN ESTIMATE PERCENT 5570-03-00 SPECIAL SERVICES 100,000 16,370 100,000 266,667 40 266,667 0,0% 5579-03-00 ARCHITECT/DESIGN SERVICES 75,000 13,832 75,000 266,667 8,917 266,667 3.3% 5580-03-00 ENGINEERING SERVICES 25,000 13,764 25,000 266,667 4,734 266,667 1.8% SUNDRY $ $ 200,000 $ $ 45,966 $ 200,000 $ 800,000 $ 13,691 $ 800,000 1.77o TOTAL EXPENDITURES $ $ 200,000 $ $ 45,966 $ 200,000 $ 800,000 $ 13,691 $ 800,000 1.7% "EXEMPLIFYING EXCELLENCE" .y Staff Report To the Members of the EDC4B Board Date: March 25, 2010 Agenda Item No: III-C. Subject: APPROVAL OF INDEPENDENT AUDITOR'S REPORT FOR YEAR ENDED SEPTEMBER 30,2009 Originated by: Sakura Moten-Dedrick Summary: The auditor's opinion on the financial statements for the year ended September 30, 2009 is that the statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely-presented component unit, each major fund, and the aggregate remaining fund information of the EDC as of September 30, 2009. The statements also present the respective changes in financial position and cash flows, where applicable, and the budgetary comparison for major fund-types, thus demonstrating the Kennedale Economic Development Corporation's end of year financial report is in conformity with the Generally Accepted Accounting Principles(GAAP) as provided by the Governmental Accounting Standard Boards(GASB)of America. Staff originally planned for the EDC to accept and approve the Independent Auditor's Report as presented by Patillo, Brown, & Hill, LLP this month. However, due to scheduling conflicts, our auditors are not able to attend. They requested that they be able to present the report and make comments to the board at the April meeting. With this in mind, staff has attached a draft copy of the report for your review in advance of next month's meeting. Recommended Motion: Please review. Staff will bring this agenda item back before the board next month. c L Disposition by Council: KENNEDALE ECONOMIC DEVELOPMENT CORPORATION ANNUAL FINANCIAL REPORT SEPTEMBER 30, 2009 F KENNEDALE ECONOMIC DEVELOPMENT CORPORATION TABLE OF CONTENTS SEPTEMBER 30,2009 Page Number IndependentAuditors' Report................................................................................................ 1 Management's Discussion and Analysis ............................................................................... 2-5 Basic Financial Statements: Statement of Net Assets and Governmental Fund Balance Sheet...................................... 6 Statement of Activities and Governmental Fund Revenues, Expenditures and Changes in Fund Balance.................................................................... 7 Statement of Revenues,Expenditures and Changes in Fund Balances Budget and Actual—General Fund...................................................... $ Notes to Financial Statements............................................................................................. 9- 14 PATTILLO, BROWN & HILL, L.L.P. s CERTIFIED PUBLIC ACCOUNTANTS ■ BUSINESS CONSULTANTS INDEPENDENT AUDITORS' REPORT To the Board of Directors of Kennedale Economic Development Corporation Kennedale,Texas We have audited the accompanying financial statements of the governmental activities and major fund of Kennedale Economic Development Corporation(the"Corporation"), a component of the City of Kennedale, Texas, as of and for the year ended September 30, 2009, which collectively comprise the Corporation's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these basic financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities and major fund of the Corporation as of September 30, 2009, and the respective changes in financial position of these activities, and the respective budgetary comparison for the General Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. The management's discussion and analysis on pages 2 through S is not a required part of the basic financial statements but is supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit the information and express no opinion on it. March 3,2010 1 401 WEST HIGHWAY 6■P.0.BOX 20725■WACO,TX 76702-0725■(254)772-4901■FAX:(254)772-4920 M Nnvw.pbhcpa,com AFFILIATE OFFICES:BROWNSVILLE,TX(956)544-7778 N HILLSBORO,TX(254)582-2583 TEMPLE,TX(254)791-3460■ALBUQUERQUE,NM(505)266-5904 f MANAGEMENT'S DISCUSSION AND ANALYSIS As management of the Kennedale Economic Development Corporation, we offer readers of the Kennedale Economic Development Corporation financial statements, this narrative overview, and analysis of the financial activities of the Kennedale Economic Development Corporation for the fiscal year ended September 30, 2009. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in the accompanying basic financial statements. FINANCIAL HIGHLIGHTS • The assets of the Kennedale Economic Development Corporation exceeded its liabilities at the close of the most recent fiscal year by$2,792,830. • The Kennedale Economic Development Corporation's net assets increased by $638,836. The increase is primarily the result of an increase in miscellaneous revenue from insurance proceeds and decreased administration expenses. • As of the close of the current fiscal year, the Kennedale Economic Development Corporation's governmental funds reported ending fund balances of $1,714,432, an increase of $498,599 in comparison with the prior year. All of the fund balance is available for spending at the government's discretion(unreserved fund balance). • At the end of the current fiscal year, the unreserved fund balance for the General Fund was $1,714,432, or 324% of the total General Fund expenditures. OVERVIEW OF THE FINANCIAL STATEMENTS The discussion and analysis is intended to serve as an introduction to the Kennedale Economic Development Corporation's basic financial statements. The Kennedale Economic Development Corporation's basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements. Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the Kennedale Economic Development Corporation's finances, in a manner similar to a private-sector business. The statement of net assets presents information on all of the KennedaIe Economic Development Corporation's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Kennedale Economic Development Corporation is improving or deteriorating. 2 The statement of activities presents information showing how the government's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in these statements for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes). Both the statement of net assets and the statement of activities are prepared utilizing the accrual basis of accounting as opposed to the modified accrual basis used in prior reporting models. Governmental activities — Most of the Corporation's basic expenditures are reported here, including administrative and incentive grants. Sales taxes and investment earnings finance these activities. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Kennedale Economic Development Corporation uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. The Corporation uses the following fund type: Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decision. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The Kennedale Economic Development Corporation maintains one individual governmental fund. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, which is considered to be a major fund. The Kennedale Economic Development Corporation adopts an annual appropriated budget for its governmental fund. A budgetary comparison statement has been provided for General Fund component unit to demonstrate compliance with the budget. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found in the financial section. 3 GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, over time, net assets may serve as a useful indicator of the Corporation's financial position. In the case of the Kennedale Economic Development Corporation, assets exceeded liabilities by$2,792,830 at the close of the most recent fiscal year. KENNEDALE ECONOMIC DEVELOPMENT CORPORATION'S NET ASSETS Governmental Activities 2009 2008 Current assets $ 1,794,675 $ 1,359,447 Capital assets 2,189,294 2,077,440 Total assets 3,983,969 3,436,887 Current liabilities 5I,139 112,893 Noncurrent liabilities 1,140,000 1,170,000 Total liabilities 1,191,139 1,282,893 Net assets: Invested in capital assets,net of related debt 1,049,294 907,440 Unrestricted 1,743,536 1,246,554 Total net assets $ 2,792,830 $ 2,153,994 The Corporation's net assets increased by $638,836 during the current fiscal year. This increase is a result of an increase in miscellaneous revenue from insurance proceeds and decreased administration expenses. KENNEDALE ECONOMIC DEVELOPMENT CORPORATION'S CHANGES IN NET ASSETS Governmental Activities 2009 2008 General revenues: Sales tax $ 298,682 $ 331,268 Rental income 237,519 212,403 Miscellaneous income 481,136 - Investment earnings 10,628 52,087 Total general revenues 1,027,965 595,758 Expenses: Economic development: Admini stration 307,820 514,605 Interest and fiscal charges 81,309 81,547 Total expenses 389,129 596,152 Changes in net assets 638,836 ( 394) Net assets,beginning 2,153,994 2,154,388 Net assets,ending $ 2,792,830 $ 2,153,994 4 Governmental activities. The Corporation's general revenues increased by $432,207 or 72.55% from last year. The primary reason for this increase was miscellaneous income increased by $481,136 or 100% to $481,136 due to insurance proceeds offset by the decrease in sales tax revenue. Sales tax revenue decreased by$32,586 or 9.84%to $298,682. DISCUSSION OF CURRENTLY KNOWN FACTS,DECISIONS OR CONDITIONS IN FISCAL YEAR 2009 The Kennedale Economic Development Corporation's projects for fiscal year 2009-2010 and beyond include: 1) Completing the development of the City's Town Center District, that's complete with walking trails, a pool fountain, amphitheater, and an overall meeting place for civic events, 2)Establish the City's first Tax Increment Financing District that will be used to finance infrastructure improvements to within the City's major commercial and industrials zones, 3) Work with existing business owners and other advisory boards to implement revisions to the City's ordinances that will enhance business productivity, and 4) Promote, market and sell the KEDC Shopping Center for future development REQUESTS FOR INFORMATION The financial report is designed to provide a general overview of the Kennedale Economic Development Corporation's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Treasurer, Kennedale Economic Development Corporation, 405 Municipal Dr., Kennedale, Texas 76060. 5 BASIC FINANCIAL STATEMENTS KENNEDALE ECONOMIC DEVELOPMENT CORPORATION f STATEMENT OF NET ASSETS AND GOVERNMENTAL FUND BALANCE SHEET SEPTEMBER 30,2009 Statement of General Adjustments Net Assets ASSETS Cash and investments $ 1,698,072 $ - $ 1,698,072 Sales taxes receivable 46,649 - 46,649 Accounts receivable 20,850 - 20,850 Deferred charges - 29,104 29,104 Capital assets: Land - 320,618 320,618 Buildings and improvements - 1,200,500 1,200,500 Construction in progress - 788,226 788,226 Less: accumulated depreciation - ( 120,050) ( 120,050) Total capital assets - 2,189,294 2,189,294 Total assets 1,765,571 2,218,398 3,983,969 LIABILITIES Accounts payable 51,139 - 51,139 Noncurrent liabilities: Due within one year - 35,000 35,000 Due in more than one year - 1,105,000 1,105,000 Total liabilities 51,139 1,140,000 1,191,139 FUND BALANCE/NET ASSETS Fund balance: Unreserved 1,714,432 { 1,714,432 - Total fund balance 1,714,432 { 1,714,432) - Total liabilities and Fund balance $ 1,765,571 Net assets: Invested in capital assets, net of related debt 1,049,294 1,049,294 Unrestricted 1,743,536 1,743,536 Total net assets $ 2,792,830 $-==L,792,830 The accompanying notes are an integral part of these financial statements. 6 KENNEDALE ECONOMIC DEVELOPMENT CORPORATION STATEMENT OF ACTIVITIES AND GOVERNMENTAL FUND REVENUES,EXPENDITURES AND CHANGES IN.FUND BALANCE FOR THE YEAR ENDED SEPTEMBER 30,2009 Statement General Adjustments of Activities Expenditures/expenses: Current: Economic development $ 418,057 $( 110,237) $ 307,820 Debt service: Principal 30,000 ( 30,000) - Interest and fiscal charges 81,309 _ 81,309 Total expenditures/expenses 529,366 ( 140,237} 389,129 General revenues: Sales taxes 298,682 - 298,682 Rental income 237,519 - 237,519 Miscellaneous income 481,136 - 481,136 Investment earnings 10,628 - 10,628 Total general revenues 1,027,965 - 1,027,965 Excess of revenues over expenditures 498,599 140,237 638,836 Net change in fund balance 498,599 ( 498,599) - Change in net assets - 638,836 638,836 Fund balance/net assets: Beginning 1,215,833 938,161 2,153,994 Ending $ 1,714,432 $ 1,078,398 $ 2,792,830 The accompanying notes are an integral part of these financial statements. 7 KENNE DALE, ECONOMIC DEVELOPMENT CORPORATION E COMPONENT UNIT-GENERAL FUND STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30,2009 (With Comparative Actual Amounts for the Year Ended September 30,2008) 2009 2008 Variance with Final Budget Budgeted Amounts Actual Positive Actual Original Final Amounts (Negative) Amounts REVENUES Sales tax $ 354,000 $ 354,000 $ 298,682 ${ 55,318) $ 331,268 Rental income 175,200 175,200 237,519 62,319 212,403 Miscellaneous income - - 481,136 481,136 - Investment earnings 50,000 50,000 10,628 ( 39,372) 52,087 Total revenues 579,200 579,200 1,027,965 448,765 595,758 EXPENDITURES Current: Economic development 469,560 671,160 296,203 374,957 449,535 Debt Service; Principal 30,000 30,000 30,000 - 30,000 Interest and fiscal charges 81,316 81,316 81,309 7 81,547 Capital outlay 300,500 130,000 121,854 8,146 563,912 Total expenditures 881,376 912,476 529,366 383,110 1,124,994 EXCESS OF REVENUES OVER EXPENDITURES ( 302,176) ( 333,276) 498,599 831,875 { 529,236) OTHER FINANCING SOURCES Proceeds from bond proceeds - - - - - Total other financing sources and(uses) - - - - - NET CHANGE IN FUND BALANCES ( 302,176) { 333,276) 498,599 831,875 ( 529,236) FUND BALANCES,BEGINNING 1,745,069 1,745,069 1,215,833 - 1,745,069 FUND BALANCES,ENDING $ 1,442,893 $ 1,411,793 $ 1,714,432 $ 302,639 $ 1,215,833 The accompanying notes are an integral part of these financial statements. 8 KENNEDALE ECONOMIC DEVELOPMENT CORPORATION NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30,2009 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of Kennedale Economic Development Corporation (the "Corporation") have been prepared in conformity with generally accepted accounting principles ("GAAP") for local governmental units. The Governmental Accounting Standards Board ("GASB") is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. GASB's jurisdiction includes nonprofit corporations that are in substance part of a governmental unit. The most significant accounting and reporting policies of the Corporation are described in the following notes to the financial statements. A. Reporting Entity The Kennedale Economic Development Corporation(KEDC) was incorporated on December 2, 1996. The Corporation is a nonprofit corporation organized and operating under the laws of the State of Texas, particularly Section 4B of the Development Corporation Act of 1979, as amended and Article 5190.6, Vernon's Texas Civil Statutes, (the"Act"), as amended. The Corporation was created following an election held by the City of Kennedale, Texas (the "City"), on August 10, 1996, to levy 0.5% local sales and use tax in the City for the benefit of the Corporation. The Corporation, as currently organized, is to promote economic development within the City, including, but not limited to, construction, operation and administration, as permitted by Section 4B of the Act, as amended. The Corporation is a discretely presented component unit of the City under the provisions of Governmental Accounting Standards Board Statement No. 14. As required by generally accepted accounting principles, these financial statements present the Kennedale Economic Development Corporation and do not include any component units, entities for which the Corporation is considered to be financially accountable. The Corporation did not have any entities which meet the component unit criteria. Therefore,the reporting entity is limited to those departments which comprise the Corporation's legally adopted jurisdiction. However, the Corporation is considered to be, and is reported as, a component unit of the City. B. 'Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the activities of the government. Governmental activities are supported by taxes, rent and investment revenue. (continued) 9 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) B. Government-wide and Fund Financial Statements (Continued) The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenue. Direct expenses are those that are clearly identifiable with a specific function. Program revenue includes 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenue are reported instead as general revenue. The government-wide and fund financial statements are provided for the governmental fund of the Corporation with a column for adjustments between the two statements. C. Measurement Focus,Basis of Accounting and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenue is recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Corporation considers revenues to be available if they are collected within 60 days of the end of the current period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. Interest income associated with the current fiscal period is considered to be susceptible to accrual and so has been recognized as revenue of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the Corporation. The Corporation reports the following major governmental fluid; The General Fund is the government's primary operating fund. It accounts for all financial resources of the Corporation. There are no other funds of the Corporation. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in the government-wide financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. (continued) 10 T. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets,Liabilities and Net Assets_or Equity Cash and Investments The City of Kennedale, Texas, pools substantially all cash and investments except for separate cash and investment accounts which are maintained in accordance with legal restrictions. The Corporation participates in the City's cash and investment pool. Investments are recorded at fair value. Fair value is the amount at which a financial instrument could be exchanged in current transactions between willing parties. Investment income on investments is allocated to the Corporation based upon its pro rata participation in the pool. 2. STEWARDSHIP,COMPLIANCE AND ACCOUNTABILITY Budatary Information The Economic Development Board of Directors and the City Council of the City of Kennedale, Texas,follow these procedures in establishing budgets reflected in the financial statements: 1. Prior to the beginning of each fiscal year, the Executive Director submits a proposed budget to the Corporation's Board of Directors for the fiscal year beginning on the following October 1. The operating budget includes proposed expenditures and means of financing them. 2. Public hearings are conducted at which all interested persons' comments concerning the budget are heard. 3. The budget is legally enacted by the Corporation's Board of Directors and ratified by the City Council of the City. 4. The Board of Directors and the City Council must approve any budget amendments. At the end of each fiscal year, all appropriations lapse. 5. Annual budgets adopted for the Economic Development Fund are adopted on a basis consistent with generally accepted accounting principles. (continued) 11 3. DETAIL NOTES A. Cash and Investments The Public Funds Investment Act (Government Code Chapter 2256) contains specific provisions in the areas of investment practices, management reports and establishment of appropriate policies. Among other things, it requires the Corporation to adopt, implement, and publicize an investment policy. That policy must address the following areas: (1) safety of principal and liquidity, (2) portfolio diversification, (3) allowable investments, (4) acceptable risk levels, (5)expected rates of return, (6)maximum allowable stated maturity of portfolio investments, (7) maximum average dollar-weighted maturity allowed based on the stated maturity date for the portfolio, (8) investment staff quality and capabilities, and (9) bid solicitation preferences for certificates of deposit. Statutes authorize the Corporation to invest in(1) obligations of the U. S. Treasury, certain U. S. Agencies, and the State of Texas; (2) certificates of deposit, (3) certain municipal securities, (4) money market savings accounts, (5) repurchase agreements, (6) bankers' acceptances, (7) Mutual Funds, (8) Investment pools, (9) guaranteed investment contracts, and (10) common trust funds. The Act also requires the Corporation to have independent auditors perform test procedures related to investment practices as provided by the Act. The Corporation is in substantial compliance with the requirements of the Act and with local policies In compliance with the Public Funds Investment Act, the Corporation has adopted the deposit and investment policy used by the City of Kennedale. That policy does address the following risks: a. Custodial Credit Risk-Deposits: In the case of deposits,this is the risk that, in the event of a bank failure, the government's deposits may not be returned to it. As of September 30, 2009, all of the Corporation's $121,918 deposit balance was covered by collateral held in the City of Kennedale's name,by the trust department of banks,who act as agents for the City of Kennedale. b. Credit Risk: It is the Corporation's policy to limit investments to investment types with an investment quality rating no lower than AAA or AAA-m or an equivalent rating by at least one nationally recognized rating service or no lower than investment grade by at least one nationally recognized rating service with a weighted average maturity no greater than 90 days. The Corporation's investments were rated AAAm by Standard and Poor's Investors Services. c. Interest Rate Risk: In accordance with the Corporation's investment policy, the Corporation manages its exposure to declines in fair values by limiting the weighted average maturity of its investment portfolio to 90 days or less, dependent on market conditions. d. Concentration of Credit Risk: The Corporation's investment policy states the maximum percentage allowed for each different investment instrument that can be used to make up the portfolio. (continued) 12 3. DETAIL NOTES A. Cash and Investments(Continued) At September 30, 2009, the carrying amounts of the Corporation's investments were as follows: Balances in public funds investment pools: TexStar 1,576,154 $ 1,576,154 Balances in public funds investment pools noted above are not evidenced by underlying securities that exist in physical or book entry form and, therefore, are not subject to credit risk categorization. B. Risk Management The City of Kennedale, Texas, carries its general insurance risks with a public entity risk pool by transferring all risks to the insurance carrier except for small deductible amounts. C. Employee Plans The Corporation has no employees. The personnel duties for the Corporation are performed by employees of the City of Kennedale, and the Corporation is charged for expenses related to these duties. For complete "Employee Plan" disclosures, reference is made to the basic financial statements of the City of Kennedale, Texas. (continued) 13 D. Capital Assets Capital asset activity for the year ended September 30,2009, was as follows: Primary Government Beginning Ending Balance Increases Decreases Balance Governmental activities: Capital assets,not being depreciated: Land $ 320,618 $ - $ - $ 320,618 Construction in progress 616,347 171,879 - 788,226 Total capital assets not being depreciated 936,965 171,879 - 1,108,844 Capital assets,being depreciated: Buildings and improvements 1,200,500 - - 1,200,500 Total capital assets being depreciated 1,2001500 - 1,20000 Less accumulated depreciation: Buildings and improvements 60,025 60,025 - 120,050 Total accumulated depreciation 60,025 60,025 - 120,050 Total capital assets,being depreciated,net 1,140,475 (60,025) - 1,080,450 Governmental activities capital assets,net $ 2,077,440 $ 111,854 $ - $ 2,189,294 E. Lon -term Debt During fiscal year 2007, $1,200,000 of revenue bonds were issued for the purpose of financing new projects. Revenue bonds outstanding at year end are as follows: Beginning Ending Due Within Balance Additions Reductions Balance One Year Government activities Revenue bonds $ 1,170,000 $ - $ 30,000 $ 1,140,000 $ 35,000 Governmental activity Long-term liabilities $ 1,170,000 $ - $ 30,000 $ 1,140,000 $ 35,000 Annual debt service requirements to maturity for the revenue bonds are as follows: Year Ending Governmental Activities September 30 Principal Interest 2010 $ 35,000 $ 79,230 2011 35,000 76,798 2012 40,000 74,365 2013 40,000 71,585 2014 45,000 68,805 2015-2019 275,000 292,248 2020-2024 375,000 184,175 2025-2029 295,000 42,048 Total $ 1,140,000 $ 889,253 14 StaffReport To KEDC Bogard of Directors Date: March 19, 2010 Agenda Item No: 111-D Subject: Review and consider financial incentive to MasTec to open a distribution office in Kennedale. Originated by: Bob Hark, City Manager Summary: MasTec Advanced Technologies is a company that distributes and installs dish satellite dishes. They are considering a location in Kennedale and approached staff about potential incentives. The company will employ 85 persons. They also contract with QT for gasoline. They requested assistance for relocation and tenant build out. Staff recommends that KEDC Board consider an incentive for 50% of the dock loading facility not to exceed $6,000. This is a reasonable level of incentive to encourage their location, it does not set a precedent of paying for tenant build outs, but it does send a positive signal to the commercial real estate community about Kennedale's interest in economic development. Supplemental information follows. Recommendation: Disposition by KEDC Board of Directors: -,7 ( APPEARANCE The Company encourages a casual work atmosphere, including dress. Nonetheless, you should dress and groom yourself according to the requirements of your position and accepted social standards, The Company expects you to maintain a neat, wellgroomed appearance at all times. 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Originated by: Kathy Turner, Secretary Summary: Discussion will take place to see if there is a need to schedule any upcoming workshops and/or special meetings, as well as discuss the need to reschedule the April 20, 2010 regular meeting to April 13, 2010. cell Recommendation: v ' Disposition by KEDC Board of Directors: sla e o.ff p To KEDC Board of Directors Date: March 19, 2010 Agenda Item No: N. Subject: Staff Announcements/Reports Originated by: Bob Hart, Executive Director Summary: Board of Directors will receive announcements/reports from the following: A. KEDC Executive Director Announcement/Reports 1. Agreement with the United States Fallen Heroes Memorial Foundation 2. TownCenter ground breaking—April 24" at 10:00 AM 3. Board Appreciation Dinner—April 291h at 6:30 PM B. 4rasi Development Report Recommendation: Disposition by KEDC Board of Directors: Staff Report To KEDC Board of Directors Date: March 19, 2010 Agenda Item No: V. Subject: President Announcements/Reports Originated by: Kathy Turner, KEDC Secretary Summary: President Announcements/Reports 1. Report agenda items to be posted for future meetings. gam ?117 Recommendation: (-) C Disposition by KEDC Bo o Directors: Autl Staff Report To KEDC Board of Directors Date: March 19, 2010 Agenda Item No: V1. Subject: Executive Session. &,v�Originated by: lathy Turner, KEDC Secretary Summary: A. The Economic Development Corporation will meet in closed session pursuant to Section 551.087 of the Texas Government Code to deliberate the offer of a financial or other incentive to a business prospect with which the EDC is conducting economic development negotiations. 1. Fallen Heroes Monument 2. 1000 E. Kennedale Parkway 3. 5500 W. Kennedale Parkway Recommendation: Disposition by KEDC Board of Directors: ►S''ta Re opt To KEDC Board of Directors Date: March 19, 2010 Agenda Item No: VII. Subject: Reconvene into open session and take action necessary pursuant to executive session, if needed. A. Consider action on 5500 W. Kennedale Parkway. Originated by: Kathy Turner, Secretary to EDC Summary: Recommendation: Disposition by KEDC Board of Directors: