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HomeMy WebLinkAboutPO 6960: PAEDC FY20-21 BUDGET AMENDMENT NUMBER 2 7, :,,, ,,... 4....,, ,, ,,o, „„ City of ' urt rthu _ Texas www.PortArthurTx.gov INTEROFFICE MEMORANDUM Date: May 18, 2021 To: The Honorable Mayor and City Council Through: Ron Burton, City Manager From: Kandy Daniel, Interim Finance Director RE: P.O. 6960—PAEDC FY20-21 Budget Amendment Number 2 Introduction: A budget amendment is requested to increase the appropriation for the Port Arthur Section 4A Economic Development Corporation by $1,150,000 for additional funds to complete the EDC press building. A grant from 501 Proctor, a non-profit Corporation, provided funding in the amount of $600,000 and the remaining $550,000 will come from the EDC Fund Balance. Background: The FY 20-21 budget was approved on September 15, 2020. This is the second amendment requested for this budget year. Budget Impact: The above request will increase the appropriation by $1,150,000 and decrease the ending fund balance in the EDC Fund by$550,000. Recommendation: The attached Proposed Ordinance No.6960 amends the budget to provide sufficient funding appropriation for the Port Arthur Section 4A Economic Development Corporation and we recommend that the City Council approve it as presented. "Remember,we are here to serve the Citizens of Port Arthur" P.O.Box 1089 X Port Arthur,Texas 77641-1089 X 409.983.8101 X FAX 409.982.6743 P.O. NO. 6960 5/18/2021 KD ORDINANCE NO. AN APPROPRIATION ORDINANCE AMENDING THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION BUDGET FOR THE FISCAL YEAR BEGINNING OCTOBER 1, 2020 AND ENDING SEPTEMBER 30, 2021 BY $1,150,000 FOR THE GENERAL FUND. WHEREAS, in accordance with Article XII, Section 9, of the City Charter, the City Council may make emergency appropriations from time to time; and WHEREAS, the City Council may make budget amendments for emergencies under Section 102.009 and for Municipal purposes under Section 102.010 Local Government Code; and WHEREAS, on September 15, 2020, the City Council approved and adopted Ordinance 20-83 which appropriated the City of Port Arthur Section 4A Economic Development Corporation 2020 - 2021 budget; and WHEREAS, on November 2, 2020, the Board of Directors of the City of Port Arthur Economic Development Corporation approved a salary increase for the PAEDC Chief Executive Officer in the amount of 3.25% effective October 1, 2020, thereby increasing the October 2020 - 2021 budget by Eight Thousand Dollars ($8,000); and WHEREAS, on January 19, 2021, the City Council approved and adopted Ordinance 21-03 which amended Ordinance 20-83; and WHEREAS, this budget amendment request is necessary to provide additional funding to complete the development of The Press Building located at 549 4th Street; and NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: Section 1. That the facts and opinions in the preamble are true and correct. Section 2. That the City of Port Arthur Section 4A Economic Development Corporation Budget be increased by $1,150,000. Section 3. That documentation has been provided to the City Council by the PAEDC as delineated in Exhibit A-1 as it pertains to grant funding from 501 Procter, Inc. Exhibit A-2 is a Summary of Expenditures related expenditures and revenues related to the current Press Building Improvements. Section 4. That Section 2 of Ordinance 20-83 is amended to read: That the budget of PAEDC is hereby appropriated the sum of Ten Million, Seventy- Four Thousand, Seven Hundred Thirty-Eight Dollars ($10,074,738). Section 5. That a copy of the caption of this Ordinance be spread upon the minutes of the City Council. Section 6. That this Ordinance shall become effective immediately. READ, ADOPTED, AND APPROVED, this ____ day of June, 2021, AD, at a Regular Meeting of the City Council of the City of Port Arthur, Texas by the following vote: Ayes: Mayor: Councilmembers: NOES: Thurman "Bill" Bartie, Mayor ATTEST: Sherri Bellard, City Secretary APPROVED AS TO ADMINISTRATION: Ron Burton, City Manager Floyd Batiste, PAEDC CEO APPROVED AS TO FORM: Guy N. Goodson, PAEDC Attorney Valecia R. Tizeno, City Attorney APPROVED AS TO AVAILABILITY OF FUNDS: Kandy Daniel, Interim Finance Director EXHIBIT "A-1" AUSTIN SAN ANTONIO BEAUMONT HOUSTON G E RM E R www.germer.com ATTORNEYS AT L A W Kate K. Leverett Principal Direct Dial:409. 813. 8004 kleverett@germer.com June 2, 2021 Valecia R. Tizeno VIA E-MAIL City Attorney 444 4th Street Port Arthur, Texas 77640 Re: 501 Procter Street, Inc. and the City of Port Arthur Section 4A Economic Development Corporation - Timeline of Events Dear Ms. Tizeno: As you know, in Fall of 2013 the City of Port Arthur Section 4A Economic Development Corporation ("PAEDC") closed on financing for the retrofitting of the 501 Procter Building (the "Project")through a new market tax credit transaction. In order to successfully receive new market tax credits to fund the Project,numerous federal tax laws and regulations had to be followed. One such regulation required a qualified active low-income community business ("QALICB") to be created to receive the funding for the Project. PAEDC, along with National Development Council, created 501 Procter Street, Inc., a Texas non-profit organization. 501 Procter Street Inc., also known as the Project Borrower, was intended to be treated as a qualified active low-income community business as defined in Section 46D(d)(2) of the Code and the Regulations thereunder and each of the Project Loans was intended to be treated as a qualified low-income community investment("QLICI"),pursuant to Section 45(D)(d)of the Code and the Regulations. The Project Borrower leased the Project to PAEDC, pursuant to the Project Lease for the seven-year new market tax credit compliance period described in Section 45D(g) of the Code ("NMTC Compliance Period"). During the NMTC Compliance Period, PAEDC paid rent to 501 Procter Street, Inc. as specified in the project lease. At the end of the NMTC Compliance Period, Chase Community Equity, LLC ("Fund Member") disposed of its interest by allowing PAEDC to acquire its interest in the fund(as defined in the Put/Call Agreement). This occurred in Fall of 2020. By disposing of its interest in the fund, PAEDC acquired all of the outstanding debt owed on the Project and was able to"purchase"the building from 501 Procter Street, Inc. for the outstanding debt. This is more commonly referred to as a direct acquisition structure when the new market structure is unwound after the NMTC Compliance Period. That is how PAEDC ended up owning the building as of Fall 2020. GERMER PLLC 550 FANNIN SUITE 400 BEAUMONT,TX 77701 PHONE:409.654.6700 • FAX:409.835.2115 Below is a timeline of events: • Fall 2013-PAEDC closed on the New Market Tax Credit Financing and began retrofitting 501 Procter Street, Inc. As a part of the New Market Tax Credit Structure,PAEDC and 501 Procter entered into a Project Lease where PAEDC was the Master Tenant under the lease. • April 2016-501 Procter entered into a Tax Credit Purchase Agreement with a private company. The proceeds of the sale resulted in funds being deposited in 501 Procter's bank account. • Fall 2020-the NMTC Compliance Period ended and PAEDC and the Fund Member exercised their rights under the Put/Call Agreement. A NMTC Exit Agreement was prepared, which outlined the process of the unwind of the structure. A part of the unwind was the PAEDC "purchased" the building from 501 Procter for the outstanding debt and a Special Warranty Deed was executed and filed. • October 2020-PAEDC and 501 Procter held a joint meeting to discuss a possible grant in the amount of$600,000.00 to PAEDC for the 549 4th Street Project. 501 Procter agreed to provide PAEDC a grant in the amount of$600,000.00 and both entities entered into a Grant Agreement in November 2020. Currently, 501 Procter Street, Inc. is still a Texas non-profit corporation authorized to do business in accordance with its Articles of Incorporation. The current members are Pat Holmes, Debora Scott, Commissioner Michael Sinegal, Eli Roberts and Kaprina Frank. Sincerely, GERMER PLLC By:' �,') Kate Leverett KL/kg Enclosure cc: Mr. Floyd Batiste VIA E-MAIL City of Port Arthur EDC P.O. Box 3934 Port Arthur, Texas 77642 Mrs. Jana Barnes VIA E-MAIL City of Port Arthur EDC P.O. Box 3934 Port Arthur, Texas 77642 Mr. George Davis VIA E-MAIL City of Port Arthur EDC P.O. Box 3934 Port Arthur, Texas 77642 Guy N. Goodson,firm VIA E-MAIL G E RM E AUSTIN SAN ANTONIO BEAUMONT HOUSTON www,aermer..c,om ATTORNEYS AT t_ AW Kate K. Leverett Principal Direct Dial:409.813.8004 kleverett@germer.com May 19, 2021 Valecia R. Tizeno VIA E-MAIL City Attorney 444 4th Street Port Arthur, Texas 77640 Re: 501 Procter Street, Inc. and the City of Port Arthur Section 4A Economic Development Corporation - Grant Agreement Dear Ms. Tizeno: As you know,the City of Port Arthur Section 4A Economic Development Corporation(the "PAEDC") is in the process of redeveloping 549 4th Street, commonly referred to as the Press Building, for use as a commercial kitchen, office space and emergency operations center. In October of 2020,501 Procter and PAEDC held a joint meeting authorizing the execution of a grant agreement in the sum of$600,000.00 from 501 Procter to PAEDC to assist in the redevelopment of the Press Building. On May 19, 2021, you sent five (5) questions regarding this transaction to be addressed. Below are explanations to each question. 1. Please explain the source of the $600,000 in revenue. The current funds 501 Procter has in its bank account are not new market tax credit funds. In April 2016, 501 Procter entered into a Tax Credit Purchase Agreement with a private company. The proceeds of the sale resulted in funds being deposited in 501 Procter's bank account. Also, from 2013 to 2021, 501 Procter received lease payments from PAEDC for lease space in the 501 Procter Building. In sum, the $600,000 in revenue is money 501 Procter has in its unrestricted bank account resulting from both lease payments and the sale of tax credits. 2. Please explain how the new market lax credit Ands are currently being held. Also, please explain how they were initially received by the granting entity and provide the name of the entity that is currently holding the funds. As stated above, the funds 501 Procter currently has are not new market tax credit funds. The funds were received through a Tax Credit Purchase Agreement with a private company that paid 501 Procter for the tax credits. The current funds 501 Procter has are being held by a local bank in a savings account, checking account, certificate of deposits and investment accounts. 3. Please explain how the new market lax credit funds can be legally utilized for the proposed grant to PAEDC. Again, the $600,000.00 grant is not made of new market GERMER PLLC 550 FANNIN SUITE 400 BEAUMONT,TX 77701 PHONE: 409.654.6700 • FAX: 409.835.21 15 tax credit funds. The purpose clause of 501 Procter provides the following: "To assist the City of Port Arthur Section 4A Economic Development Corporation (the "PAEDC") in financing, constructing, rehabilitating, renovating, repairing, equipping, furnishing and leasing properties, facilities, street improvements, and parking Iots for properties including, but not limited to, the Port Arthur Savings Bank Building located at 501 Procter Street, Port Arthur, Texas. " The grant to assist in the redevelopment of the Press Building falls into the purview of Article Five Section 1 of 501 Procter's Articles of Incorporation. 4. Relevant documentation. Enclosed you will find a copy of the Agreement, meeting minutes from the October 9, 2020 meeting, and the Articles of Incorporation. Please do not hesitate to call if you have any additional questions. Sincerely, GERMER PLLC By: Kate Leverett KL/kg Enclosure cc: Mr. Floyd Batiste VIA E-MAIL City of Port Arthur EDC P.O. Box 3934 Port Arthur, Texas 77642 Mr. George Davis VIA E-MAIL City of Port Arthur EDC P.O. Box 3934 Port Arthur, Texas 77642 Guy N. Goodson,firm VIA E-MAIL 501 PROCTER STREET INC., GRANT AGREEMENT This Grant Agreement(the"Agreement")is made by and between 501 Procter Street, Inc. a 501(c)(3) non-profit corporation (the "Corporation") and the City of Port Arthur Section 4A Economic Development Corporation, a Texas non-profit corporation organized under Chapters 501 and 504 of the Local Government Code(the"Grantee"). Recitals A. Grantee has submitted to the Corporation a request for funds in the amount of SIX HUNDRED THOUSAND AND NO/100 DOLLARS ($600,000.00) (the "Incentive Grant") to help fund the build out of 549 4th Street, Port Arthur, Texas (the"Press Building") B. Grantee's Incentive Grant would be used to fund the build out of a commercial kitchen and a conference center located in the Press Building. C. The Corporation has committed Incentive Grant to assist in the redevelopment of the Press Building in compliance with its purpose which is to assist in combating community deterioration by providing economic development and preserving, financing, constructing, rehabilitating, renovating, repairing, equipping, furnishing and leasing historic buildings in downtown Port Arthur in consideration of the Grantee to provide the positive community development assistance set forth in this Agreement and to make other commitments and to provide certain reporting requirements and information to Corporation as provided in this Agreement. NOW, THEREFORE, IN RELIANCE UPON the Recitals set forth above which are incorporated in this Agreement as fully set below and in consideration of the further mutual representations, obligations and commitments of Grantee, Grantee and Corporation agree as follows: • 1. Restricted Grant. Subject to the provisions of this Agreement,the Corporation will provide a one-time payment of SIX HUNDRED THOUSAND AND NO/100 DOLLARS ($600,000.00)to the Grantee upon the execution of this Agreement by both parties. The providing of the funding is subject to all the requirements of this Agreement and any and all other requirements of federal, state or local laws, rules or regulations. 2. Statement of Work. Grantee covenants that the SIX HUNDRED THOUSAND AND NO/100 DOLLARS ($600,000.00) of restricted grant funds from the Corporation shall be used to facilitate the construction of a commercial kitchen and office space located in the Press Building. The Grant may be used to pay costs as delineated in the Guaranteed Maximum Price Contract between the Grantee and SETEX Facilities&Maintenance, LLC. Grantee agrees within thirty (30) days after execution of this Agreement to provide the Corporation with an itemized budget detailing the anticipated expenditures,uses and encumbrances for the Grant. 3. Records and Reports. Grantee shall further provide a monthly basis beginning December 1,2020,all documentation reflecting the progress of the construction and improvements to the Press Building. 4. Grantee Requirements. Grantee agrees to provide to the Corporation upon the execution of this Agreement,the following: a. a copy of the Guaranteed Maximum Price Contract between Grantee and SE 1`EX Facilities &Maintenance, LLC; b. a copy of the AIA Document B 101-2017 between Grantee and Powers Brown Architecture of Texas, LLC; c. a copy of the specific improvements; d. a copy of the most recent audited financial statement of Grantee; 5. Disbursement. Corporation will disburse to Grantee the full SIX HUNDRED THOUSAND AND NO/100 DOLLARS ($600,000.00) restricted grant funds upon the execution of this Agreement; however, Grantee agrees that it shall not expend any such grant funds except for duly incurred invoices or other service contracts or necessary capital expenditures that are the basis of the Grant. 6. Independent Contractor. Grantee shall operate hereunder as an independent contractor and not as an officer, agent,servant or employee of the Corporation. Grantee shall have exclusive control of the program/work and all persons involved in same subject only to the terms of this Agreement and shall be solely responsible for the acts and omissions of its officers, members, agents, servants, employees, sub-contractors, program participants, licensees and invitees. It is expressly understood and agreed that no officer,member, agent, servant, employee, sub-contractor,licensee or invitee of Grantee nor any program participant hereunder is in the paid services of the Corporation, and the Corporation does not have legal right to control the actual program/work funded hereunder. 7. Loss, Damage, Personal Injury. Grantee covenants and agrees to indemnify, hold harmless and defend, at its own expense, the Corporation and its officers, agents, servants and employees,from and against any and all claims or suits for property loss or damage and/or personal injury, including death to any and all persons, or whatever kind of character whether real or asserted, arising out of or in connection with the execution, performance, attempted performance or non-performance of this Agreement and/or the operations, activities and services of the program described herein, whether or not caused, in whole or in part, by alleged negligence of officers, agents, servants, employees, contractors or sub-contractors of the Corporation. 8. Misuse Misappropriated,Misapplied. In the event it is determined that the Grantee has misused, misapplied or misappropriated all or any part of the grant funds described herein, Grantee agrees to indemnify, hold harmless and defend the Corporation and its officers, agents, servants and employees from and against any and all claims or suits resulting from such misuse, misapplication or misappropriation of such funds,and to reimburse the Corporation the amount of such money misused,misapplied or misappropriated. #1797788 2 Page 9. Conflict of Interest. No officer, employee, member or program participant of Grantee or its contractors or sub-contractors shall have a financial interest, direct or indirect, in this Agreement or the monies transferred hereunder, or be financially interested, directly or indirectly, in the sale to Grantee of any material or services purchased with any funds transferred or expended hereunder. Any violation of this paragraph with the knowledge,expressed or implied, of Grantee or its contractors or sub-contractors, shall render this Agreement voidable by the Corporation. 10. Invalid Representation. The provisions of this Agreement are severable, and if for any reason a clause, sentence,paragraph or other part of this Agreement shall be determined to be invalid by a court or federal or state agency, board or commission having jurisdiction over the subject matter thereof, such invalidity shall not affect the other provisions which can be given effect without the invalid provision. 11. Performance. The failure of the Corporation to insist upon the performance of any term or provision of this Agreement or to exercise any right herein conferred shall not be construed as a waiver or relinquishment to any extent of the Corporation's right to assert or rely upon any such term or provision on any future occasion. 12. Instrument. This written instrument constitutes the entire agreement by parties hereto concerning the matters performed hereunder, and any prior or contemporaneous, oral or written agreement which purports to vary from the terms hereof are void. IN WITNESS WHEREQF, the parties hereto have executed this Agreement in Beaumont, Jefferson County,Texas,this Q) day of November 2020. 501 Procter Street,Inc. Y: a is, resident ATTEST: Debora Scott, Secretary GRANTEE: City of Port Arthur Section 4A Economic Development Corporation #1797788 3 Page By: i)„,4/ Darrell Anderson,President A 11'bST: zak__ _. , Secretary #I797788 4 Pap City of Port Arthur Section 4A Economic Development Corporation NOTICE IS HEREBY GIVEN in accordance with order of the Office of the Governor issued March 16, 2020 The City of Port Arthur Section 4A Economic Development Corporation will conduct a Special Joint Meeting with the 501 Procter Street, Inc. Board scheduled for Friday, October 9, 2020 at 9:30 a.m. located at 501 Procter Street Port Arthur, Texas 77640, by a telephonic meeting in order to advance the public health goal of limiting face-to-face meetings (also called "social distancing") to slow the spread of the Coronavirus (COVID-19). There will be no public access to the location above. The public dial-in-number to participate in the telephonic meeting is hosted through Conference Calling. The Dial-In Number is:(346)248-7799 Meeting ID is: 829 6106 3934 Passcode: 450476 The public will be permitted to offer public comments telephonically as provided by the agenda and as permitted by the presiding officer during the meeting. A recording of the telephonic meeting will be made and will be available to the public in accordance with the Open Meetings Act, upon written request. City of Port Arthur Section 4A Economic Development Corporation And 501 Procter Street, Inc. MINUTES Special Joint Board Meeting 501 Procter Street,Ste. 100, Port Arthur, TX 77640 Friday, October 9, 2020 10:24 a.m. I. CALL TO ORDER The Board of Directors of the City of Port Arthur Section 4A Economic Development Corporation met in a Special Joint Telephonic Meeting with the 501 Procter Street, Inc. Board on Friday, October 9, 2020. The meeting was called to order at 10:24 a.m. II. ROLL CALL The following Board Members were present: Darrell Anderson,John Chirafis,Jerry LaBove, and Dallas Smith. 1. To discuss for possible consideration a Downtown Revitalization Grant from 501 Procter Street, Inc. for the completion of the buildout of 549 4th Street Property. This item was for discussion only by the Port Arthur EDC Board Members. The 501 Procter Street, Inc. Board acted on approving a Downtown Revitalization Grant from 501 Procter Street, Inc.for the completion of the buildout of 549 4th Street Property in the amount of$600,000.00. The 501 Procter Street, Inc. Board's vote was unanimous. Motioned carried. Xl. ADJOURNMENT OF MEETING Meeting was adjourned at 10:44 a.m. APPROVED BY THE BOARD OF DIRECTORS ON THE DAY OF O Ott i 2020. SECRETARY OF THE BOARD MINUTES OF SPECIAL MEETING OF BOARD OF DIRECTORS OF 501 PROCTER STREET, INC. And CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION The Board of Directors of 501 Procter Street, Inc. and the City of Port Arthur Section 4A Economic Development Corporation Board met in a Special Joint Telephonic Meeting on Friday, October 9, 2020 via telephonic, the meeting was called to order at 10:24 a.m. The following Board Members were present: Pat Holmes, Eli Roberts, Debora Asbury-Scott and Michael Sinegal. The purpose of the meeting is to consider the following: 1. To discuss for possible consideration a Downtown Revitalization Grant from 501 Procter Street, Inc. for the completion of the buildout of 549 4th Street Property. A motion was made by Michael Sinegal and seconded by Eli Roberts to approve a Downtown Revitalization Grant from 501 Procter Street, Inc. for the completion of the buildout of 549 4th Street Property in the amount of$600,000.00. The vote was unanimous. Motion carried. The meeting was adjourned at 10:44 a.m. Fax Server 6/17/2013 4 :32 : 13 PM PAGE 002/004 Fax Server FILED In the Office of the Secretary of State of Texas JUN i72013 ARTICLES OF INCORPORATION OF Corporations Section 501 PROCTER STREET,INC. I,the undersigned natural person of legal age and a citizen of the State of Texas,acting as the sole incorporator of a corporation under the Texas Non-Profit Corporation Act (the "Act"), do hereby adopt the following Articles of Incorporation for such corporation. ARTICLE ONE CORPORATE NAME The name of the corporation is 501 Procter Street, Inc., a Texas non-profit corporation (the "Corporation"). ARTICLE TWO REGISTERED AGENT AND REGISTERED OFFICE The street address of the initial registered office of the Corporation is 4173 39th Street, Port Arthur,Texas 77642 and the name of its initial registered agent at such address is Floyd Batiste. ARTICLE THREE NON-PROFIT CORPORATION The Corporation is a non-profit corporation and shall be organized and operated exclusively for non-profit purposes. ARTICLE FOUR DURATION The period of duration is perpetual. ARTICLE FIVE PURPOSE The purposes for which this Corporation is organized are: (1) To assist the City of Port Arthur Section 4A Economic Development Corporation(the "PAEDC") in financing,constructing,rehabilitating,renovating,repairing,equipping, furnishing and leasing properties, facilities, street improvements, and parking lots for properties including, but not limited to, the Port Arthur Savings Bank Building located at 501 Procter Street,Port Arthur,Texas. (2) The Corporation shall have the following general purposes and powers: to have and • exercise all rights and powers which the laws of Texas now or may hereafter confer upon non-profit corporations, including the power to make contracts and incur liabilities, to deal in and with property of real, personal, or mixed character interest Fax Server 6/17/2013 4 :32 : 13 PM PAGE 003/004 Fax Server therein, wherever situated, as may be necessary or appropriate to the furtherance of the primary purpose of this Corporation; (3) Notwithstanding any of the purposes and powers stated above,this Corporation shall, not except to an insubstantial degree, engage in any activities or exercise any powers that are not in furtherance of the primary purpose of this Corporation. This Corporation is organized pursuant to the Texas Non Profit Corporation Act,and no part of the income (if any) of the Corporation shall be distributable to its directors or officers, nor shall any income inure to the benefit of any of its directors or officers. The Corporation shall have no stock or share. Nothing in these articles, however, shall prevent the reimbursement of reasonable expenses incurred, or the payment of reasonable compensation for services rendered,in connection with the affairs of the Corporation. ARTICLE SIX MANAGEMENT Management of the affairs of the Corporation is to be vested in the directors of the Corporation. ARTICLE SEVEN ORGANIZATIONAL STRUCTURE The Corporation will not have members. ARTICLE EIGHT DIRECTORS Members of the Corporation's Board of Directors shall be governed by these Articles of Incorporation and the Corporation's Bylaws. The exact number of directors of the Corporation shall be specified in or fixed in accordance with the Bylaws of the Corporation at a number no greater than ten (10)and no less than three(3). ARTICLE NINE INITIAL BOARD OF DIRECTORS Kaprina Frank 4179 39's Street Port Arthur,Texas 77642 Eli Roberts 4179 39th Street Port Arthur,Texas 77642 Pat Holmes 4179 39i°Street Port Arthur,Texas 77642 Michael Sinegal 525 Lakeshore Drive Port Arthur,Texas 77640 moms Flip? Fax Server 6/17/2013 4 :32 : 13 PM PAGE 004/004 Fax Server Debora Scott 320 George Lane Port Arthur,Texas 77642 ARTICLE INCORPORATOR The name and street address of the incorporator is Guy N. Goodson, 550 Fannin Suite 400, Beaumont,TX 77701. The undersigned incorporator signs thcse articles of incorporation subject to the penalties imposed by law for the submission of a false or fraudulent document. EXECUTED in Beaumont,Texas,on the 17'h day of June,2013. son EXHIBIT "A-2" .1:z111�i C,iry orf yam~ www.PortArthurTx.gov INTEROFFICE MEMORANDUM Date: May 18, 2021 To: The Honorable Mayor and City Council Through: Ron Burton, City Manager From: Kandy Daniel, Interim Finance Director RE: P.O. 6960 —PAEDC FY20-21 Budget Amendment Number 2 Introduction: A budget amendment is requested to increase the appropriation for the Port Arthur Section 4A Economic Development Corporation by $1,150,000 for additional funds to complete the EDC press building. A grant from 501 Proctor, a non-profit Corporation, provided funding in the amount of $600,000 and the remaining $550,000 will come from the EDC Fund Balance. Background: The FY 20-21 budget was approved on September 15, 2020. This is the second amendment requested for this budget year. Budget Impact: The above request will increase the appropriation by $1,150,000 and decrease the ending fund balance in the EDC Fund by $550,000. Recommendation: The attached Proposed Ordinance No.6960 amends the budget to provide sufficient funding appropriation for the Port Arthur Section 4A Economic Development Corporation and we recommend that the City Council approve it as presented. "Remember,we are here to serve the Citizens of Port Arthur" P.O.Box 1089 X Port Arthur,Texas 77641-1089 X 409.983.8101 X FAX 409.982.6743 Ecomomic Development Corporation (EDC) Summary Press Building Improvements As of May 25, 2021 Revenues Funding Source Amount FY19 Budget EDA Grant 4,700,000 FY20 Budget EDC (20%Grant Match) 1,175,000 FY20 Budget EDC 1,825,000 FY21 Budget EDC 1,000,000 8,700,000 Total 8,700,000 Expenditures Amount Total Paid Thru 5/25/21 5,264,529 Contract Amts Remaining: SETX Contract 20-053 3,462,889 SETX Contract 20-398 1,534,996 DataVox 23,970 Powers Brown Archit. 26,250 Science Engineering 4,000 5,052,105 Total 10,316,634 Additional Funds Needed to complete existing project (1,616,634) Ecomomic Development Corporation (EDC) Summary - Proposed Amendment Press Building Improvements As of May 25, 2021 Revenues Funding Source Amount Proposed Amendment to fund project shortfall: Other Supplies Materials Reduce EDC budget 5,000 Building Maintenance Reduce EDC budget 12,000 Other Contractual Svcs Reduce EDC budget 10,000 4B Development Reduce EDC budget 80,000 Promotional Programs Reduce EDC budget 10,000 Development Reduce EDC budget 569,000 Business Park Develop, Reduce EDC budget 5,000 Electricity Reduce EDC budget 20,000 Gas Reduce EDC budget 4,000 Contingency Reduce EDC budget 238,100 Furniture and Fixtures Reduce EDC budget 70,000 1,023,100 Fund Balance Use EDC Fund Balance 550,000 501 Proctor Grant Grant 600,000 Total 2,173,100 Expenditures Amount Additional funds needed to complete existing project 1,616,634 SETX Contract Amendment Proposal 550,000 Total 2,166,634 Funds Available 6,466