Year End Report 2015 - Kilgore Economic Development Corp. · 2018-04-09 · ★ Accomplishments of...

Year End Report

2015

FY 2014-15 Kilgore EDC Year-End Report

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About this report

The Kilgore Economic Development Corp.’s 2014-2015 Fiscal Year End Report is a snapshot of the internal workings and results of the organization over the past fiscal year. The following document includes:

★ Accomplishments of companies with KEDC agreements ★ KEDC investments in product improvement ★ Activities undertaken to develop leads and achieve Mission and Vision Statements ★ End of year financials (unaudited)

Board of Directors 2014-2015

J. Ty Sharp President

Wilbur F. Yates Vice President

Pat Nault Secretary-Treas.

Bryan Johnston Asst. Sec.-Treas.

Ruben Martin Director

Professional Staff

Amanda Nobles

Executive Director Jana Russell

Assistant Director Heather Jurenka

BRE Specialist Stephanie Moore Office Manager

About Kilgore EDC

Kilgore Economic Development Corporation is an organization founded in 1990 and funded by a dedicated sales tax approved by voters. It is directed by a five-person board and managed by a staff of four with certifications in economic development and economic development finance. KEDC has won international awards for excellence in economic development, including the 2015 Community Economic Development Award from the Texas Economic Development Council.


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Executive Summary of Accomplishments and Activities

At each year’s end, KEDC reflects on its Strategic Plan as a whole as well as the Mission and Vision Statements to determine how its accomplishments and activities are moving the organization forward. Below is a summary of accomplishments for fiscal year 2014-2015.

KEDC Mission Statement To enhance a business climate that is conducive to job creation and retention, improving the standard of living for Kilgore residents.

2014-2015 accomplishments through KEDC Economic Development Performance Agreements ★ 468 jobs retained. ★ 68 new jobs created. ★ 536 total jobs under agreement.

The total number of jobs under agreements increased slightly from the last two fiscal years, up from 502 in 2013-2014 and 492 in 2012-2013.

KEDC Vision Statement A strengthened and diverse economy that is considered to be a prime business location.

2014-2015 accomplishments through KEDC Economic Development Performance Agreements ★ Companies invested $11.5 million. ★ Incentives averaged 8% of company investment, although individual agreements varied depending on

individual company variables. Variables include number of employees, payroll, contribution to ad valorem and sales taxes, and NAICS code.

While investment numbers are down from 2013-2014 at $18,712,000 they are up from 2012-2013 when companies invested $10,876,000. In addition, the number of agreements related to the energy sector continued to decline from 47% in 2012-2013 to 30% this fiscal year.

Committed to Kilgore

Asset and infrastructure development were key areas this year. The board directed the expense of $5.1 million in those categories including $2.2 million for city projects and $1.9 million for more traditional infrastructure developments, including roads and communication fiber to support business interests.

And to progress the marketability of Kilgore to primary employers, the board directed almost $1 million to be spent on asset development in Synergy Park and for new property on FM 349 as well as on workforce development at the Advanced Technology Center.


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Accomplishments and Investments

The Kilgore Economic Development Corp. board of directors invested in seven companies through Economic Development Performance agreements in fiscal year 2014-2015, one more than the previous year. The percentage of KEDC investment to company investment is at 8 percent, which is less than the level of investment during 2012-2013, but more than the average of 2013-2014 at 5 percent.

Company Name Job Base New Jobs Company Investment in $

KEDC Investment in $

Surface Equipment Corporation 90 8 309,000 37,400 Triumph Structures East Texas 106 0 5,300,000 400,000 Skeeter Products 223 20 3,700,000 252,533 Freedom Communication Technologies NEW 26 1,320,000 150,000 Drilltools, LLC 40 5 750,000 50,000 SCP Distributors, LLC 7 4 75,000 12,300 Weldcal, LLC 2 5 361,500 22,000 TOTALS 468 68 11,815,500 924,233

KEDC improves its industrial park assets to remain competitive, including the upgrade of Synergy Park’s most marketable sites to “shovel-ready” as well as the development of new property on FM 349. KEDC also invested in asset development for workforce development benefitting primary employers through the completion of the Advanced Technology Center.

Asset Development Investment in $ 4831 FM 349 CDL Site 93,441 FM 349 Industrial Area Site Development 178,265 Synergy Park Lot 13 Drive and Utilities 4,700 Synergy Park Lots 14, 15, 16, 18 Clearing 7,914 Synergy Park Lots 14, 15, 16, 18 Geotechnical Survey 29,694 Synergy Park Site Conditioning Site Conditioning 28,358 Synergy Park lots 9, 10, 11 Clearing 78,880 Virtual Shell Building in Synergy Park Building Plans 40,080 Advanced Technology Center Machinery and Equipment,

Site Preparation, and Miscellaneous Supplies

487,336

TOTALS 948,668.50 KEDC also invests in the infrastructure of the city when revenue allows and when allowable under law to support retention and development of business enterprises as well as Type B Projects approved by voters.

Infrastructure Improvement Investment in $ Engineering for city Trail System 65,720.71 Kilgore Baseball Complex 2,146,204.29 Energy Drive Improvements 125,988.50 Phase IV Synergy Park Road Expansion 1,800,000 Fiber Extension to Cargill Road Industrial Area 20,000 TOTALS 4,157,913.5


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And companies returned the favor by continuing to meet goals of economic development performance agreements. The chart below lists the compliance results of companies that have active agreements with KEDC. In the instances below where job goals had not been met, it should be noted that incentives were not paid.

In line with our vision, only 30 percent of ongoing agreements are with companies related to the energy sector. The number of agreements with companies in the energy sector has declined 33 percent over the past five years.

No. Company Energy Sector Terminated Compliance

Jobs Investment

1 Pak-Sher X X

2. H & W Services (Infrastructure Grant) X X

3. Independent Drilling Y X

4. Cameron Technologies Y X X

5. Clean Blast X X

6. SCP X X

7. Southern Plastics INC (CSI #5) X X

8. Cameron Technologies US Y X X

9. Holt Mining Solutions Y X X

10. Key Energy Services Y X

11. Cypress Interactive/EDsuite X X

12. H& W (3rd and final year) X X

13. Triumph Structures-East Texas Inc. X X

14. Composite Fluid Transfer X X

15. Orgill X X

16. Pallet Companies dba Ifco Companies X X

17. Halliburton Y X

18. Southern Plastics (CSI #4) X X

19. Plastics Network X X

20. Maverick Well Service Y X X

21. Surface Equipment Corporation X X

Tax Abatements 22. Orgill X X 23. DTP Leasing/Drilltools X X


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A Three Year Comparison of Accomplishments

The number of jobs affected by agreements with KEDC has grown slightly over the past three years:

Company investment affected by agreements with KEDC declined since last fiscal year but is an increase from 2012-2013:

536

502

492

$11,815,500

$18,712,000

$10,876,000

2012-2013 2013-2014 2014-2015


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Strategic Plan for Economic Development

Business Climate Goal: encourage investment and job growth and retention from existing primary employers

Objective A: enable existing primary employers to know and utilize the resources of KEDC and increase familiarity with the KEDC brand.

Objective B: advance perception that Kilgore is a prime business location

Objective C: contribute to a highly skilled and productive workforce

Improve CEO perception of Kilgore and KEDC

Complement traditional economic development models with sustainability methods

Evaluate workforce characteristics and compare to the needs of targeted industry sectors

Develop regular communications with primary employers

Collaborate with partners to influence economic outcomes and perceptions

Develop workforce training plan

New Investment Goal: attract jobs & investment that diversify the economy & improve the standard of living for Kilgore residents Objective A: Plan or relevant property availability

Objective B: affect small town perceptions

Objective C: build brand recognition

Objective D: develop internal leads

Maintain a relevant inventory of available properties with suitable infrastructure

Pursue indicators that verify quality location services

Maintain leading presence in marketing initiatives

Engage in activities offering quality opportunities with lead generating agents and targets

Consider rail in Synergy Park

Communicate consistent marketing campaigns to support regional, state and internal initiatives

Administration Goal: organize staff and resources, directing activities toward goals and objectives

Objective A: establish goals for the organization

Objective B: coordinate efforts among all elements of the organization

Objective C: protect the financial integrity of KEDC

Create and implement an active strategic plan

Assess organizational functions Operate KEDC efficiently and effectively

Determine staffing needs and professional development needed to progress brand and productivity

Work with legislators to maintain the scope of the dedicated sales tax to fund economic development

Communicate activities and engage input from constituents


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Administration Activity Highlights

Continuing Education through Professional Membership Webinars, Conferences or Events

Texas Economic Development Council

International Economiic Development Council

Southern Economic Development Council

Business Retention Expansion International

Industrial Asset Management Council

Northeast Texas Economic Developers Roundtable

Local Communications

Website news

Newsletters

Corporate Facebook

Company LinkedIn page

Financial Integrity

Successful audit

Positive Cash Flow


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Business Climate Activity Highlights

Business Retention & Expansion

Business Retention Interviews

Quarterly Events for Human Resource

Professionals

Quarterly lunch & learn events

Industry Appreciation Events

Synergy Center Meeting Space

Economic Development Partner Collaboration

City of Kilgore Kilgore Main Street

Kilgore College KC Small Business

Development Center

Kilgore ISD

East Texas Council of Governments

East Texas Workforce Board

KEDC Advisory Board

Synergy Park Property Owners

Region VII Education Service Center

Workforce Development

Gregg County WorkReady Communities Initiative

KEDC Advanced Technology Center Grand

Opening

Kilgore College Advanced Welding Academy

Opening

KISD Dual Credit Welding Program Funded


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New Investment Activity Highlights

Product Improvement Property Development

Shovel-ready sites prepared

Synergy Blvd. road expansion approved

Approval of virtual building program

Lead Development

Partnerships with State & Regional marketing groups

Company recruitment trips

Trade shows & conferences

Professional site selector interviews and presentations

Internal

Industry directories

Calls to targeted companies

BRE program

Website

Brand recognition

Social media placements and promotions

National news releases

Topical video development

Expertise Recognition

Certified Economic Developer certification

Economic Development Finance Professional certification

Economic Excellence designation from TEDC

Community Economic Development Award for 2015 from TEDC


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Three Year Comparison of Activities

KEDC monitors the number of leads generated each year as well as lead sources to determine which marketing efforts are most on target.

Numbers of leads for the past three years are virtually the same each year although represent a healthy jump from 2011-2012 when there were 79 leads:

The sources of leads are primarily developed internally using a combination of regional marketing groups, branding and BRE efforts:

1

17

62

28

5

AEP

Realtors

Internal

State

Referral

2012-2013 2013-2014 2014-2015


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Trend Analysis

During the last five –year period when the energy sector investment and employment numbers have been volatile and on a downward trend, KEDC has produced results by developing more economic development leads and closing more projects.

An analysis of recent trends compares 2014-2015 results to three different averages: three-year, five-year and an adjusted five-year. During fiscal year 2010-2011, a number of high impact projects closed, which is an extraordinary event. To normalize results, certain data was adjusted, as shown in the chart below.

Measurement 5 Year Average 5 Year Adjusted 3 Year Average 2014-2015 Projects 7 5.5 6 7 Company Investment $16,390,441 $13,149,996 $13,801,167 $11,815,500 Incentive/Investment 6% 6% NA 7% 8% Total Jobs Under EDPA 591 443 510 536 Retained Jobs Under EDPA 505 374 423 468 New Jobs Under EDPA 86 69 87 68 Asset Development 1,056,542.42 1,056,542.42 NA $636,200.24 $948,668.50 Infrastructure Development 1,608,167.59 1,608,167.59 NA $1,960,179.32 $2,011,709.21 Other City Projects $2,146,204.29 Energy Diversification Percentage 45% 45% NA 39% 30%

KEDC has displayed its commitment to the Kilgore business climate with these results in the following definitive ways over the past five years:

★ The number of projects closed has increased in spite of a volatile economy. ★ The energy sector is a high impact sector for the economy that is difficult to offset. However, company

investments are higher than in 2012-2013 and only $1.3 million less than the adjusted five-year average. ★ The percentage of KEDC incentives to company investment reflects several factors, including impacts to

the economy other than investment. Those impacts include payroll, number of employees and the impact of new construction.

★ Company focus on retained or new jobs changes from year to year, but the number of total jobs under agreements continues to remain stable with a slight uptick.

★ The KEDC board directed the investment of $5.1 million in Kilgore through various channels this fiscal year, which included traditional infrastructure for business interests and economic development assets as well as the release of more than $2 million for city projects through Type B projects elected by voters. KEDC has averaged almost $3.5 million annually over the past five years in asset, infrastructure and community development projects.

★ As mentioned, diversifying the economy is a long term task as is replacing the high impacts of the energy sector. The energy diversification percentage reflects the number of ongoing agreements with companies in the energy sector. While the percentage decline is a testament to effective and targeted project development, it illustrates also the challenge of maintaining positive end of year results.


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Unaudited Financials

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(Profit & Loss Budget vs. Actual October 1, 2014 to September 30, 2015, follows)

Year End Report 2015 - Kilgore Economic Development Corp. · 2018-04-09 · ★ Accomplishments of...

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