Master Plannning - Regular Meeting

I just don't want to have conversations. All right, it is 934. I'm going to call the Corpus Christi B Corporation meeting to order. Ms. Huerta, would you please call the roll?

President Diana Summers.

Here.

Vice President Jesus Jimenez.

Here.

Can we see Mr. Jimenez also? There you are. Okay, thank you. Secretary Mark LaRue.

Here.

Victoria Holland is absent. Johnny Filippello. Here. Duke Conchola.

Here.

Claudia Mustagasi. Okay, we do have a quorum present to conduct the meeting.

Thank you, Ms. Huerta. Up next, we have public comment. Do we have anyone here that would like to make public comment? Seeing none, Ms. Huerta, have you received any public comments?

No, ma'am.

Thank you. I'm going to go a bit out of order here today. We have some people waiting online. So up first, I'm going to go to public hearing item 261458, public hearing and resolution authorizing the El Bolio Bakery Program project for economic development of a bakery manufacturing business, creating up to 121 full-time jobs, approving up to $363,000 in business incentives to El Bolio Bakery LLC for economic development and approving a business incentive agreement with El Bolio Bakery LLC for a term of five years. Is there a staff presentation?

Yes, good morning. Sarah Tindall, Corpus Christi Regional Economic Development Corporation. Thank you for your time today. We're excited about this program. It's bringing manufacturing jobs to our region. One of the most important things about economic development is to ensure that you are bringing new primary jobs to your area, and this fits the bill nicely on that one. So it's 121 new permanent jobs with a payroll of $3.6 million. This is a new project for our region. The company is located in the Houston metropolitan area. They have several locations there, and they will be expanding into the Corpus Christi market. So they will be servicing some large customers. They sell to Cisco and others, and then also they will have a small operation that will allow the general public to buy their products.

Wonderful. Do we have, I believe there is a slideshow on El Bolillo? Do we want to go through this?

Yes. Or, well, the El Bolillo folks are on the WebEx. Would you like them to go through this, or do you want me to? That would be wonderful. Okay. If we can do that.

Okay. Ms. Ashley and Catherine.

Good morning. This is Catherine Nash with Creative Planning. My colleague Ashley Lundy is on the call with me as well, as is Andrew Miller, Chief Operating Officer with Elvillio Bakery. So we appreciate your time and thank you so much for the opportunity to present this. I am, Sarah, I can go through this really quickly if you're okay with that.

Yes, please.

Yes, ma'am. Okay. So obviously not going to read everything to you all, but the history of El Bolillo is deep. This is multi-generation family business, as Sarah stated, based out of Houston. They are expanding with this manufacturing operation. This will be their first large expansion of this kind. They are taking over a building that I know has been empty in Corpus Christi. Obviously, if everything goes through approval, today's Type B board and the city council meeting. They are very excited about this expansion, and we've been working on this for a few months because, as Sarah mentioned, they have a lot of interest in in their product by restaurant service providers. So any food provider, any entity that is selling to restaurants or other types of stores, your typical grocery store, they're very interested in their product. It's different in the market and they're excited for the opportunity to do this manufacturing in Corpus Christi, which will, I hope, give Corpus Christi a little bit more of a Knowledge for these food industries in case there are other businesses there that are interested in having comparable relationships. So that just so I'm not reading for you. These are very traditional Mexican baked goods. As I mentioned, this is a multi generation family operation. They've had a long standing history in different communities, selling these to the public. And as the demand has increased, you'll see the different offerings there as the demand has increased, they've been approached by the food service providers. The project, just as Sarah stated, we're looking at 121 jobs. They will be filled very quickly, at the most, probably within the first three years is our projection. Andrew and his team have been working pretty diligently on that, looking at the opportunities within Corpus Christi. When we presented to the CCREDC board in May, one of the things that we were able to discuss was there are some opportunities with the different educational institutions within Corpus Christi, maybe to offer internships, give your students some other opportunities to learn about not only food production but at a large scale. So we're very interested in, we're very excited about offering that as well. And as I mentioned, you're looking at expanding in a region's quality jobs and hopefully other career pathways. A lot of the Corpus, excuse me, of the El Bolillo staff has been with the company also for multiple generations, and they've been trained and gone through the management process, become leaders in the organization. And that's exactly what we hope will happen with Corpus Christi staff. So as you can, as again, a few other things I've mentioned, they're rooted in the Texas community at multiple locations in Houston and they're making expansion to other retail and potentially other manufacturing locations. We've had conversations with other cities. El Bolillo has been looking at expanding. for a while, but they want to be deeply involved in the Corpus Christi area. They want to make sure that, as I said, they're partnering with educational institutions, they're supporting other initiatives within the community that might be available, that might be options, whether it's through volunteer hours, financial support. So like any manufacturing organization that moves into a community, they don't intend to stay within their four walls. They're very interested in in being active and available to the community, hopefully with the potential of growing even more over the years as the demand requires. So as you can see, and as we've mentioned, not only will their hiring be happening, but they do offer a full benefits package to their employees. The majority of El Bolillo employees are full-time. This is not 121 part-time, you know, small 20-hour-a-week jobs. And those benefits, we realize, are very important to the community. We want employees to feel confident in being able to secure health care, to be able to focus on having a retirement one day and the funding to do that. And they also, the leadership, again, two generations right now still involved. They are very focused also on the progression. As their leadership at the top within the family continues to evolve and grow, they want that to happen at the level that's also at the retail and the manufacturing level. Nothing is more important to an organization like this that's family run than institutional knowledge. And as you will see, we have businesses, other locations like in Houston, that growth has made it possible for expansions like this into Corpus Christi. So the job impact project details, we, as 121 jobs, they have made sure the wages are, that allow for local Corpus Christi residents to apply for those jobs, to be able to stay in the area, as opposed to having to leave the community and find another role. So wages and benefits reach that point was very important. As Sarah stated, the ask on our behalf is $363,000, which equates to about $3,000 a job. As those jobs are committed and we see that growth, we will obviously make the, as the agreement states, we will make that submission every year, show payroll and employee base at the end of the calendar year on December 31st of each year. We're looking at investment of not only the property, but internal renovation of the facility and also significant investments in equipment. This is not because it will be a large-scale manufacturing and not one of their more traditional retail bakery sides. That equipment is one of the things that we... will have a larger investment in than would typically be seen. That as the organization and potential growth in the area continues to expand as they see interest outside of the Southwest, then we hope that that will grow as well, be able to add additional lines as needed and potentially expand the operations there. We were excited to get the CCRED support. I want to speak on behalf of myself, Andrew, and the rest of Creative Planning and El Bolillo when I say that Sarah and her team, Aaron, Randy Aguilar, before he was gone from the organization, incredibly helpful, have made this possible, and we're incredibly grateful. I know that it is not a small feat to get through all of the steps that we have thus far, and I do want to make sure to take this opportunity to thank you all for the opportunity to present, but also to thank Sarah, Aaron, and Randy when he was still with the RADC for their exceptional support as we moved through this.

Thank you, Catherine. You guys have any questions for her? Thank you. Does the board have any questions?

I just had one. That's a lot of jobs. Is this a 24-7 operation, or how does that look?

Catherine, can you talk about the shifts?

Actually, I'm going to ask Andrew if he'll speak a little bit to that in the planning process, not only what they are considering in the beginning, but as they see growth. Andrew, do you mind to speak to that, please, sir?

No, not a problem. So the 121 jobs plus, that's going to be from starting shifts about 4 a.m. and then we'll run about till midnight. As the sales ramp up with the distribution, then we add another shift on the overnight. So it would be in surplus of the 121 jobs. Thank you. Yes, sir.

I have a few other questions. Oh, I'm so sorry.

I'll let you go first. How many employees do they have right now on the six locations that they have in Houston and Dallas? Or in Houston, not in Dallas?

So, yes, ma'am, in Houston. So each location we average anywhere between 120 to 150 per unit.

And I'm pretty sure it was on the first, I'm sorry, I'm sure it was on the first screen, but how long have you guys been in business?

Since 98.

First of all, thank you all for the presentation and really excited about this project. I've heard about it, glad we finally are getting to see it. So I'm fully excited to see growth and opportunity in our community. economic development I am a little concerned to just receive this contract and it's a lot larger than our previous contracts so city staff can you tell us what kind of what's changed and what are the reasons for the changes yes so there was a change in leadership in the city attorney's office and I'm now the interim city attorney and so one of the things I think you're aware of is

Some of our agreements have been under scrutiny, and I think part of that scrutiny is a lack of detail and protection baked into the agreements. And so our previous template was really boilerplate bareboned. And so my goal is to beef up the agreement to make sure both parties, the business receiving incentive, the type B, and the city all understand expectations.

and uh... and and uh... and and and and and and sure complies with the law okay so uh... items sixteen the agreement uh... i feel like that's new language uh... it obviously releases the city uh... in the no city funds are pledged uh... But what happens when the city's in disagreement with the Type B board? Are we in a predicament then or not?

No. So everything is statutory. So the Type B approves projects. The C approves budgets. So there's no conflict there.

Okay, I tend to feel like we're in a conflict right now on one that makes it a challenge for protection for you guys, but when we're trying to release funds.

So this isn't waiving any disagreement between the type B and the city, right? So this is the person receiving the funds ready not to sue the city. So my position is anyone receiving grants shouldn't be able to sue the city.

I wholeheartedly agree, and that's my concern here, though, is we're in a situation right now where we're trying to pay off on a grant and not able to. And you're waving, and because we're not able to is the city, not the Type B corporation, so...

Do you have some additional questions? I do, I have one more, sorry. So right now on the six locations that you have, I'm assuming that you already have contracts that you have to answer to. So opening a brand new location in Corpus Christi, are you guys going to start or are you bringing some of those contracts to be fulfilled with the location here or are you barely gonna start trying to get more contracts to be able to do. And I ask this because if you don't have the production, then you're not going to need 121 people to be working there.

So it's an excellent question. Thank you for bringing it up. We do have contracts in place already with Flowers Baking. I'm not sure if you're familiar with them, but they supply a lot of bread themselves and then also distribute across the continental U.S. And then we're supplying through to performance food groups, which is actually a direct competitor with Cisco. We also supply to Cisco and Gordon Foods from a space capacity. We will have to move additional consumption from those contracts. So the demand is already there. We need to build additional production facilities to come online to handle that production because just limited on capacity, that's what Ms. Nash alluded to with the equipment purchases is much higher to purchase those lines. And then on the pay per job is higher because the training that we do onsite, someone doesn't have to come with preexisting knowledge or education. We conduct that training. so that way they can work on the machines to produce the product proper. We have quality control jobs as required by our command audits that we pay for the certifications, whether it be HACCP, And then the FSSC 22,000, which is like an SQS certification to be able to sell products to a distribution company or grocer. So all of those jobs will have to be, and we bring down our own people to help do that training, but then they have to be there on site during that production to certify everything before it ships out.

I'm going to expand on, Mr. Miller, I'm going to expand on your answer and explain, and I didn't go through this. Thank you for the question again. I didn't go through this as I was speaking to the presentation. The first, you'll see in the packet, excuse me, in the agreement that Mr. Bryce put together, the first year expected jobs we are being very conservative at 41. um the contracts in place and the fulfillment that they're able that mr miller alluded to what they're not able to do with the locations is the rush is one of the reasons that um sarah and aaron and randy have worked so diligently to get us to this place the second this is approved by the city council they will set in motion um pulling permits doing all the things needed to get the former walgreens building up because as soon as product can be finished it will be on trucks and out the doors to restaurants and grocery facility grocery stores so this is while 121 jobs sounds like a lot when you think about the size of that facility if you're looking at what is the equivalent of a 16 hour full-time you know work day moving through excuse me 20 hours moving through each day, moving through the lines, packaging, getting it ready for shipping. That's going to take quite a few people. Those are going to be different steps. Those are going to be people trained in different ways, as Mr. Miller just spoke to, the different audits, the internal controls. So I understand completely you don't want to see, and I'm sure you all have seen this in the past, and that's one of the reasons that you're asking. You don't want to release funds, have this grant, And then at the same time, say it's just going to sit empty and you don't see any PFG trucks backing up to take product. That won't be the case, and I think that that's the reason not to speak on your behalf, Mr. Bryce. I think that's the reason that one of the things you put into the agreement was that you wanted it, that we would not claim or request any of those grant funds until the end of the year, until jobs could be, the jobs would be proven. We're not getting these funds up front.

Thanks for the explanation.

Yes, thank you.

So just a question for city staff again. Obviously, I'm very supportive of this company coming to town. If we approve this today, will it go to council when?

The next scheduled agenda is already out for the 15th, so the next schedule will be October 13th.

Okay, and does that fit El Bolio's timeline on that? Because I know this has been delayed for quite a while.

So I will say it does not. As I mentioned, the second it passed the city council, Mr. Miller and his team will start pulling permits, be able to start moving with contractors, ordering equipment, all of those things that are necessary. I know that Mrs. Tindall has been working to try and have a meeting before that. I'm not going to speak to the legalities of that. To be frank with you, it doesn't, but we understand that there are limitations. There are statutory requirements. Agendas have to be released to the public and all of those things.

So is there, because I know we've had this on our agenda for quite a while and it's been delayed and delayed. Is there any way to move up council approval of something like this or not?

Well, there's no way to put it on the existing agenda per state law. It's already been posted. So the next available council meeting is that first meeting in October.

Okay.

Is there a reason why it wasn't included on the agenda for the 15th?

At this point, it wasn't approved.

But we've had items on future council agendas in the past that haven't been fully approved by the B Corporation in anticipation of our consideration.

So I would state that we received the contract from El Bolido at somewhere around midnight. So it was still under negotiations.

But we've been doing this since our August meeting, correct? It was pulled by staff in the August meeting, and then we tabled it, I believe, at last week's meeting.

So it's difficult to approve something before it's been fully negotiated. So let's say, I don't know, at midnight they said instead of 121 jobs, they're going to produce 61 jobs. If the type B had already approved it and the council already approved it, it's not in sync. So the process is... Negotiate agreement once the terms are met. I mean what's the terms agreed to bring it to type B?

approved take it to the council I Understand that I'm saying we've had items before us in the past That could have been withdrawn if we didn't have approval from this board.

That is correct I would say that those were in a different environment those were also prior to when we received an independent report based on how we post agreements, how we post captions, when things get approved. And we have been making changes for that. Even this month, we pulled a type B item off a city council agenda because we did not have a signed agreement. We're just not doing it anymore. We're trying to follow the guidelines that were set out by, I can't think of that man's name. but yes so when we post things how we post things how accurate they are whether or not they are in draft whether or not they are signed and the amount of time that we are given boards and the council and all of the city departments to read them that that is all changing you are correct in the past we have done those things we are not doing those things anymore were we aware that

pushing this past the September 15th council meeting did not work for El Bolio and that they were going to have to make accommodations to this?

I believe everybody knew that there were challenges, yes. However, we have tried to be clear that once we even had that original draft that it was not going to get through the city attorney's office and without the changes that Mr. Bryce has put into it, it's not getting through council either. I don't see that happening. So it is in the agreement's best interest to go to city council in the format that it's in now and have the greatest chance of success?

And I'm not arguing that. I think having a, I mean, nobody's going to argue against having a stronger contract, especially up here. My concern is, is that in the presentation, you know, they're talking about another location. And so if we are aware that they have a deadline and we've been working through these problems on the contract since August, You know, are we putting, you know, my concern is, is are they, I guess my question is for El Bolio. You know, are we still committed to this location? Does this timeframe issue cause an issue for you to move forward?

I'm going to, Mr. Miller, I'm going to answer this and say yes. with mr garza's signature last night yes which i i acknowledge happened very late in the day and and my apologies for getting that out at the time we did but we were double checking with outside and in-house counsel that everything was as we had discussed with mr bryce which it was he did an excellent job um but one of the things is i you should know clearly that with mr garza's signature on that that is our commitment there isn't we when we make the assumption that sarah and aaron and the um ms summers all the team that we've been working with on this we've been speaking to have the full confidence that it will pass city council we are working on that assumption and yes we would have been very happy for this to have finished in august it didn't because it didn't we are not we are not pulling away now from Corpus Christi. So unless something happens at City Council that dramatically changes the agreement that we worked with the CCREDC with, and that you all are now debating and that's in front of you today, El Bolillo wants to locate in Corpus Christi. They like the location, they like the potential partnerships with educational institutions, and they're very happy, as they've worked and discussed with Workforce Development, the different employees that they could not only train, but see in future leadership roles. So Mr. Garza's signature is our commitment, fully, to Corpus Christi. Barring some massive change by the City Council, they're not supporting it, then we will be in Corpus Christi.

Ms. Nash, thank you for that. I want to say how excited I am to see a food manufacturing business want to come to Corpus Christi and bring this many jobs. I think it's a wonderful project and I'm looking forward to seeing it come to fruition. So thank you for your patience in getting this to this point. One of the concerns I do have is in the contract, it does state that the project site would be completed and bakery manufacturing operations begin December 31st, 2027. With this additional delay in October, has that been, or with it not going to council until October, has that delay been anticipated in that manufacturing date?

It's going to depend on how long or how many turns go back and forth with the permitting department. Usually it takes us about nine to 11 months between weather for construction. So there might be an adjustment to the timing there just depending on how long this all takes just because of the time that's needed for each department to do their work before we can begin the construction and ordering of equipment.

Okay, thank you.

President, if I may, as the former director of development services, our current director is in the back, our permitting timeline for commercial permits is six business days.

That is wonderful news.

Houston is anywhere from four to 16 weeks. Austin is eight to 10 weeks. So our permitting is the fastest in the state, and I would be willing to offer El Bolio a free early assistance meeting that their design team can come in and their construction team can come in and we can go over all the plans before they actually submit.

Thank you for that, Mr. Dice. I appreciate that input as well as that offer. Are there any other questions?

So this is another question kind of relating to number 16 on the provision and then number 18. Um, on the notice of default and cure scenario. You acknowledge the city's not a party to the agreement in 16, but yet the city can make claim a default in 18, and then the corporation's kind of left stuck holding the bag on what to do there. So how do we deal with that?

So ultimately, it's still a corporation decision, right? But, okay. Okay.

Okay, I want to go back to that, but first I want to thank Elbow Eel certainly for putting your trust in the city and for working through this with us. Obviously, it's been a more difficult and tedious process than normal. Sarah, thank you for picking up where Randy left off. Jennifer and your team, thank you. I guess, yeah, that's kind of where I wanted to go back to. We're saying in here the city has the right to issue a notice of default on a contract they're not party to, Buck. I mean, I guess that's, I just want to make sure we're.

I can certainly, so I would recommend not trying to mess with this contract because I believe it was graciously viewed in a short timeline and agreed to all the terms. But in the, so this is kind of a model for the future template. So this is not the final template because this was done in a quick turnaround. And so we'll take that into consideration, that clause in the future template.

So can I ask just one modification question?

Again, I would recommend not trying to modify this agreement.

Just asking if there's a process where I could make an amendment to remove the city from the notice of default piece if you're going to keep the 16 in there.

You could make a motion to amend it, and then we could send it back to El Bolillo, and they would have to, of course, agree to it.

But if they agree to that... then it could go to council with no delay on our part. Correct, correct. Okay, so I'll move to, I guess we need to make a motion for. Motion to amend. Yeah, motion to amend in 18, remove the city on, if corporation determines that company is in default, corporation shall provide written notice and just remove the city from that language, so.

Second. Is there a second? Was that Mr. Jimenez? Yes, sir.

Is that Andrew? Oh, it's JJ. Okay.

I have a question before that. So does the city has to agree on that amendment too?

The city agrees to the project. I don't know whether that amendment will affect the city's decision to approve the project or not. Okay.

But then where does our authority... BEGIN IF THE CITY CAN IMPAIR OUR CONTRACT BUT NOT BE A PART OF IT.

THIS ISN'T AN ACTIVE CONTRACT. THIS IS JUST A DRAFT PROPOSED CONTRACT.

I UNDERSTAND THAT.

BUT YOU'RE SAYING... WHAT I'M SAYING IS THE PROGRAM. THE CITY COUNCIL, THEY HAVE

based on the terms of the contract they can choose to approve or not approve the program but you're saying but what you're saying is they could choose to not approve the program if we remove the wording to eliminate the city being able to cancel or or issue a notice of default on our contract that they're not a part of well i think that they can they can choose to not approve a program for any reason i understand that but i just find that

They wouldn't see the actual amendment. They would see whatever we approved here today. I mean, I think, yeah, certainly, I think, like you said, they could come back. They could come back with changes in theory, Buck.

I mean, I don't... And, again, I just got this right before this meeting.

And I understand that you got it last night, too, Buck.

I mean, I think we're all... Buck wrote it, I think, right?

I'm saying... sent to them with with you know potential red lines so so they could have came back and said hey uh city we don't like section 18 just strike that out right but they said hey everything you drafted is kosher we signed on dotted line so that's where we're at today and my whole point to that amendment is if 16's in there then 18 probably should just be about the corporation if the board wants to know that that's fine yeah yeah i i don't disagree with johnny and i think

know if if we were on under a time crunch but doesn't sound like we're really under time crunch because this isn't going to go to council until october so i would hope we could get it done before then and we do have a meeting scheduled for every week this month in order to make sure that this yeah is handled so we have a motion in a second we need a vote on the amendment jj jj second do we need to have him second on film

Or he's on WebEx. Do we need to see him second? Yes, I would. I prefer that. Thank you.

I can't hear him. Can you? There he is. OK, awesome.

Thank you, JJ. OK.

Thank you, Mr. Jimenez. So with that, all those in favor on the amendment to Section 18 to remove the city, the language on the city on the notice of default, all those in favor say aye. Aye. Any opposed say no. He voted.

He voted aye. Okay. Thank you.

Chair, if I may. Kathy, are you still on the line? Is El Bilio still on? Yes, sir. They should still be on. No, I'm still here. I'm assuming you're okay with that change?

We will, I'm not going to, I would like to read it first.

Okay, we'll send it over.

If that's okay. Obviously, from having listened but not having read it, I just would like to read it first and then give Mr. Miller and his in-house counsel the opportunity to do the same. From what I've understood, I don't see it being a large issue, especially as the chairwoman said that there's another meeting scheduled at this time. before the 13th the city council meeting on the 13th so that will give us time i know that mr bryce knows what he's doing and we'll be able to change that pretty quickly so that we can review it um but from what i've heard i don't see an issue however obviously i don't want to commit to anything until we can see the language

So now we need to vote on these.

Well, actually, we also need to open the public hearing. I mean, I don't think we had public comment earlier. I don't see anyone here, but just so we take care of that, I'd appreciate that. And then we'll vote on it as amended, as you said, sir.

Okay. So with that, are there any other questions?

Okay.

Sorry. So with that, I'm going to open this item up for public hearing. Are there any public comments?

Point of privilege, I'll actually make a public comment. Saratindal District 2. My grandfather owned a bakery in Bay St. Louis, Mississippi when I was a little girl, and he raised five kids that way. And so I think it's so wonderful that this is still an important manufacturing piece, however many years since he opened his. And so I'm so glad that thank you guys for your support bringing this to our area.

Thank you.

They open at 4 a.m. because that's when you've got to start proofing that bread and getting it into the oven.

With that, is there any other public comment? Seeing none, I'm going to close the public comment hearing. Ms. Huerta?

Okay, so then at this point we're just going to pass the motion as amended, including the amendment Mr. Filippella made.

I want to state, you know, I think there's immense support for this project from this board, and we want to make sure that this is brought forward in as timely a fashion as possible. We appreciate the patience, but given... you know, just getting the contract, you know, I think there were some changes that we wanted to see, but that doesn't detract from the support that we have for this project. So we want to thank El Bolio's patients and, you know, wanting to consider the change as well. So thank you to them. And thank you for coming to Corpus Christi and looking to expand and create more jobs here and for us to be your expansion market. We really appreciate that. So. With that, I will entertain a motion to pass as amended.

I second.

We do need to vote on the resolution as amended. It includes the contract, so that's what we're doing. Yes. Okay, so. So moved.

Okay.

Is there a second? I second. Okay. Okay. All those in favor of passing the motion as amended, say aye. Aye. Any opposed say no. The motion carries.

Thank you.

Thank you all.

Okay. With that, I'm going to go to our next public hearing item on our agenda. Item number five, public hearing on the capital improvement project for museum science and history improvements. Is there a staff presentation?

Yes, ma'am. This is a presentation on the Science and History Museum, some improvements that were approved in the FY27 budget. This is the required public hearing. I have a short one-slide presentation if you'd like to hear it. We are not requesting any action, but we are required to have a public hearing.

Does the board have any questions for staff on the item?

Just, I guess, one question. Timeline of getting these proceedings going. Is it another in dire need of some of this stuff?

Yes. On this particular, I believe it is in design currently. And so it'll go out for bid hopefully yet this year.

Are there any other questions from the board? Seeing none, I'm going to now open the item for public hearing. Is there anyone here that would like to make public comment on item number five? Ms. Huerta, did you receive any public comment on item number five? No, ma'am. With that, I'm going to close public hearing. Moving on, I'm still going to continue out of order and go on to our agenda items. I'm going to go to agenda item number three, discussion and possible action to authorize the retention of one or more attorneys or law firms as general counsel or special counsel for the Corpus Christi B Corporation. Is there a staff presentation on the item?

No, ma'am. We do not have a staff presentation, but we do have the interim city attorney, myself, and the director of management and budget and interim assistant city manager, Michael Dice, and we're here to answer your questions and help facilitate your conversation. Excellent.

Are there any questions from the board? I'm happy to start. Um, I guess I have some, you know, kind of record type questions. Um, so first the Corpus Christi B corporation is a separate corporate entity from the city of Corpus Christi, correct? Correct. Um, does any provision bylaw ordinance or agreement expressly designate that we have to use the city attorney as the general counsel to the B corporation?

No, the city attorney services is provided under the management agreement with the city.

So does, under, excuse me, I'm trying to gather my thoughts here. Does any such authority give the city attorney any power over the selection? Are we able to approve our own general counsel should we decide to, who it is?

Yeah, so the board does have the autonomy to select its own general counsel or special counsel as it sees fit. The only caveat to that is any contract for legal services has to be either tied to a project that's been approved by counsel or it has to be approved inside the type B budget, which is approved by counsel.

So you're saying that we can retain our own professional services, which is a line item in our budget?

So if I may, what I believe, what I think you're trying to get to is that if there is an approved project currently in the fund, for example, let's say the Economic Development Fund, and legal services are needed for that active program or project that has already been approved by city council, then without a budget approval and within $100,000, within that budget, excuse me, then yes, legal services can be procured as long as the appropriation has been made in that fund. If you want to procure legal services outside of an approved program or project,

then that would need to go to city council for approval because there's not an approved program or Project and the funds would need to be appropriated for that So I guess let me ask this question more directly if we wanted to have our own general council Not tied to just a specific project, but to help alleviate. I think they'll bully a prop the El Bolio Example that we just heard would be a prime example if we had our own general council that answered directly to us know would that contract could that contract have been brought forward more timely and so my question is that wouldn't necessarily have been tied to an approved program because we would be working through the contract right so um so do you want to talk about we want to talk about general counsel in the in this example right yeah this would be an example for general counsel so

Yes, they could have a non-city affiliated attorney through a type B hired general counsel could have done that. However, there's also the second part of that that you'd want to consider. That attorney still would have had to have worked with the city attorney to come sort to some sort of...

It's a budgetary issue. So unless counsel approves the expenditure. So counsel, you all approve projects and contracts that counsel approves expenditure. So... For a general council, you would need to go to council with a budget amendment and say, we want to budget $100,000 for general council. And then they would approve it, and then you'd go out and hire such council.

And we can do the procurement before you get the budget amendment as well, I believe, correct? We can go through the procurement process before the budget amendment.

So the board is an independent body, so if the board wants to choose its own attorney, they can. But the city can assist because we do procurement all the time. And if the board wants to do some sort of RF...

q uh... for attorney services we we could do that people who respond to our few you'd evaluate them and you could select an attorney and then a budget amendment would go through to get that that contract in the service or that contract that appropriations proof so you're saying that we would have to have an agreement with an attorney before we could send it to council i think the more practical way would be to get the budget amended and then seek attorney

Okay. I have a question. So if I understood correctly, so you're saying that if we have our own attorney, the city attorney is still going to have to review or whatever or work with our attorney?

No. However, when it comes to getting things onto the city, the city agenda...

I don't have to... I'm independent of the selection of their attorney. Okay.

Of their attorney. No. For example, in our example, if El Bolillo had been put together by a third party general counsel hired and paid for by type B, it would still, that item would still need to be reviewed by the city attorney's office in order to get onto the agenda and present it. That doesn't, it still stops because nothing gets on that agenda without the city attorney's. And then when council is considering that item, the city attorney is in the room and provides advice on those items to them. So there's still that step. So potentially that can cause more delays. But I don't know. I would think it would depend on the template, the project, the timeline. I wouldn't say yes or no.

I think the concern is given what's just transpired, we're now without any counsel in a certain matter. And so if we had had general counsel, they would not have been conflicted from this program or from the ongoing litigation. And so having general counsel would protect us overall.

And I understand that, but like how many years before, I mean, has that happened before or has the type B ever had their own counsel before?

I can't speak to anything prior than six years ago, but nothing's coming to mind.

Are there other cities that have type B boards that have their own general council?

I don't know the answer to that. I had a research at issue.

I think there is because I think George Hyde represented several. But yeah, I mean, Claudia, I think to your point, it depends. Every type B is different. I mean, the composition... I get both sides of it, and I certainly get what Buck is saying about the budget item and what Jennifer is saying, that yes, either way, if we had our own general counsel, they would then still have to work with the city attorney's office to get it approved for the agenda. I mean, in terms of cost...

And what I'm saying is, I mean, I'm not saying that it was an isolated case that we're dealing with, but at the same time, they're already doing the changes on the contracts to make them more specific and more in detail to avoid situations like that again.

And I appreciate the changes that were made. My concern is that we had a project that came before us in August, and... We could have lost that project. I mean, they could have gone somewhere else due to the delays. They said, quite frankly, that the current timeline doesn't really work for them. Fortunately, they have They're making it work, but my concern, I guess where I'm bringing this forward is for two reasons. Could that contract have moved forward more quickly in the sense that if we had had our own general counsel already line that out, then it would have just been an approval by the city attorney instead of an entire writing of the contract. My second major concern is that we are without any general, any council on a specific ongoing litigation item. And this is the exact reason why.

Okay, so let's shift from general council over to special council then. We also discussed the interest that you've shared in hiring special council. Buck, do you want to talk a little bit about that process, please?

Before we talk the process, I just want to get caught up to speed on understanding on the special counsel situation. So what I recall, city came to this board and said, we recommend you hire the same counsel that we had for this special matter. We did that. We followed those processes. We listened to our council. We have done everything asked of us by the city on this matter. And then we show up to our last meeting and we no longer have council. So it's still not really clear what happened. I did receive a letter from our council stating he had to withdraw based on input from the city. So I'm trying to understand what's going on there.

So I'll reiterate, Mr. Hyde withdrew on his own volition. Any statement to the contrary is just untrue.

And I want to be really careful that that particular conversation is not on the agenda today. So may we please? No, that's fine. Don't be sorry. But if we can please stick to the agenda item, I would appreciate it.

Thank you. Okay, but we're talking special counsel. Special counsel. And we have an agenda item we can't even meet on today because we have no special counsel at this time. Is that safe to say?

No, we can talk about it here today.

Okay.

So there is a process where you can... Buck, do you want to talk about the process a little bit? Please.

So let me look at the statute here. Essentially, pursuant to... 501.152, one of the costs that you're authorized to expend is administrative expenses tied to an intractable project. So once there's a project, you know, you can pay for stuff like administrative expenses and stuff. But without a project, without an approved project, let me rephrase that, without a city council approved project, You can't hire a special counsel. For example, let's say Company A proposed to come to Corpus and build widgets. And you're like, man, this is an important project. We need special counsel to shepherd this widget factory through. But that project hasn't been approved by the city council yet. So you would need to go to council and say, council requesting a special expenditure to hire an attorney for this widget factory because the city attorney is too busy to draft all the technical details because this is a special widget. Either way, council is always the one that approves expenditures.

Give me just one second, please. Sorry, thank you. So if there were no approved project, but you still required special counsel, you could still procure for that special counsel services, but the approval of the budget expenditure, because it is not tied to an approved program or project, that budget expenditure would have to go through city council for approval of the appropriation expenditure.

But you still can select. So you're saying that we, in terms of special litigation counsel, which we are without right now, if we approved expenses to hire special litigation counsel, that has to go back to city council?

If you are going to engage a lawyer for special reasons, you would have to put forth some sort of budget request to get it approved by council to engage that attorney on items going forward.

That would be for every program, correct? You're saying that we would, for every program, we would have to request?

We're talking about two different things. So the corporation has brought up the idea of having corporation-specific general counsel that would handle this meeting. special counsel would handle any, just that, specific project, specific litigation on one item.

Specific to a program.

To one project.

project just specific to what progress so we would have to write that we would like to have just in case a budgeted uh approval for special counsel in case we need it on each project or program no i don't believe so so so what you're describing is more of a general counsel so you you could just go to council hey we just need a general counsel to kind of stand by entertainer for if any issues come up on a special project that he can engage in right is that what you're asking Just the way I understood it was that we would have, there would be some language in each project that we would have to include a budget item for special counsel.

Not for special counsel, no. If you did general counsel, you might want to budget for some of that expense in each of the six funds so that general counsel can help you across those six funds that type B and type A carry. But for the special counsel, it would only come out of one fund, and you would say, for example, we're going to work with a lawyer down the street for an estimated amount of X, and we're asking for a budget amendment to approve that, and it's for this purpose.

But if there was a conflict with a city... And then the city is the one that's actually having to approve.

The budget.

The budget for the attorney. That sounds kind of not correct.

Let me give you a hypothetical. So if this board were sued, if the city council doesn't appropriate funds, we don't have representation?

And I'd kind of like to jump in on this one. So we have an ongoing legal action and are currently without legal representation.

On that item, yes.

And city legal cannot represent us.

The city attorney's office is conflicted in a matter before the type B.

So, and your position is that we cannot retain, fund, and or fund an independent council without additional council action on the

Our position is that you can select and request funds to expend for that purpose, yes.

So what legal mechanism do you recommend that we use in order to obtain independent counsel and protect our interests in the meantime? Because I ask that this get pushed forward for the September 15th agenda, because we don't have legal counsel right now, and it's not on the agenda for the 15th. What I'm hearing and what is happening is that we are without legal counsel because it was not put on the September 15th agenda until October with an ongoing active litigation. So I'm going to just get to my question then. What do you recommend we do in the interim to protect ourselves?

So I'm not aware of any active litigation against the Type B Board, but if the Type B Board desires special counsel, then I would recommend proposing some sort of budget amendment to counsel to fund that special counsel. And if you have someone in mind, that may...

help counsel make their decision as far as you know hey i know attorney b and he's he's top grade and then they'd be okay attorney b hundred thousand that makes sense we approve the expenditure we are not a named party in the active litigation but we are the other party of the contract considered that's with the active litigation um and due to recent actions there's a very high probability that this could become active litigation so what you're saying is is that were SOL until October.

There's always a potential for special meetings for both the Type B and the City Council.

I guess because where my confusion is, well, I have two questions. The first would be, so... When we did the budget, was that two months ago?

Yes, sure.

And we, and our legal, we have legal budgets within there, but that is, we're basically, what we're being told is that we still have, would have to go back to council to use what's already budgeted for the special council, is that?

So that budget was tied to an approved project from cost savings within the fund or the appropriation and the expenditures had already been approved. That particular project is no longer approved.

So... That program is terminated.

Thank you. That program has been terminated. So there is no longer... We're no longer allowed to expend any funds on that program. However, anything that happened up until that point was still okay under... that approved program.

But it was an approved program.

Up until, I don't know the date, I'm sorry.

I guess, before you go there, John, just... In terms of procurement of a special, just so I understand the mechanics, so is there any kind, do we have to do any kind of RFP or anything like that? I mean, I just want to make sure we're following.

Are we talking special?

Special counsel. Special counsel.

State law does not have any procurement rules as applies to attorneys. Okay. As I said, the board can maybe create a subcommittee if they want to to try to facilitate interview attorneys potentially, and as I said, I think the city would be willing to do an RFQ process, but yeah.

Okay, I just want to make sure we're certainly following that.

So back to my hypothetical, in the event this board is sued, we have to go ask the council for permission to Fund us to have an attorney to represent a lawsuit on an independent corporation. I don't feel I'm not an attorney and I don't know the laws of the land, but that just doesn't feel right.

I believe that's in state law. That is in state law due to I don't know how the sales tax flies into it.

And I guess coming full circle, if we had had our own independent general counsel, this would not be a problem.

I don't know what would have been a problem and what would not have been a problem. I'm sorry, ma'am.

So there's always a chance for conflict because even if you had your independent counsel, likely you'd have other clients.

But there's a much less likely of a conflict given that we would have our own independent counsel from the city and the city's attorney.

I just couldn't say, like I said, other attorneys that represent, they'll have more than one client.

So, again, just as a board director of a corporation, and I'm coming off of this board, which I'm very okay with, I'm more concerned for those that are staying on and are coming on. How are these individuals protected as individuals representing a corporation if they can't get legal defense for the corporation? So what...

where I think we would tell you to head our recommendation, our guidance, I'm not gonna tell you what to do, but our guidance would be is if you want to secure special counsel that less than four of you put together a committee to look at attorneys that you want to consider, and then you bring them back for open session, you have that conversation about who you wanna hire and what you think you're gonna spend, and then we can put together a budget amendment that we can go to city council for. But we can't even put it on a city council agenda if we don't have a dollar amount. It's not going to be an open-ended...

I guess, yeah, I mean, that's where I guess I'd like to make a motion to... to create that subcommittee. I mean, because my concern right now is if we get served in a lawsuit, we have no one to actually get counsel from.

Until October.

Yeah. So I think we need to create that subcommittee and move forward with that.

Okay, who would appoint the members? Would it be the chair or did you want to decide that on your own?

Mr. Leroux, I will be terming out September 30th, so I will defer to you on that.

I would motion to make the subcommittee, it has to be three or less, correct?

Right, it has to be less than a majority, so yes.

Okay, I would... make a motion to make the subcommittee for procuring a special counsel to be uh... president diana summers vice-president uh... jay jay kimenez and johnny philip second that's for the party of a question yet

I'm really torn here just trying to figure this all out, and I agree we need to move forward on this. Our city attorneys conflicted out, but yet the board that is associated with us can pull our funds for representation at any time. That just doesn't, I mean, I'm trying to wrap my brain around this.

And I'm sorry, I, it's,

I mean, it's just, it's a state law structured

city council is the the uh... controls ventures okay so that this the subcommittees for general counsel suggestions special catholic uh... can we i guess my only other question just uh... to make it a little broader and and is there uh... is at work at least making it includes general counsel and and i'm to where we can discuss both

I guess, yeah, I would be willing to amend the motion to the subcommittee to discuss appointing a special legal counsel as well as discussion of possible general counsel. Is that right?

I second that amendment. I'm not saying we do that. I feel like we're left on an island right now, and that doesn't feel very good as an organization.

So with that, with the motion to appoint myself, Mr. Jimenez, and Mr. Filippello to the special committee, we would need to hold another meeting in the month of September prior to the September 30th term in order to review the recommendations and consider moving forward with... hiring special legal as well as potential a general um i think what this board has all explicitly stated is is time is of the essence here and we're not very happy to be without um and so uh i appreciate you know, kind of the returning of the weekly meetings in order to get this sorted out. And I guess from there, that recommendation, whether or not it's approved by this board, would have to go to council in October. And so we'll still be without until October, but we'll at least have a recommendation prior to then.

I guess, you know, regarding that, I mean, certainly the city council can do whatever they want, but we could, in theory... in writing ask for a special meeting to address that from the council they don't have to do anything with it but there would be nothing stopping us from from asking that due to due to our concerns i think we could lay them out in or even in a resolution i guess there's also potential if a attorney would be willing to work kind of pro bono until such agreement was approved i don't know if you're gonna find her he does that but

so so the again just one more question i'm trying to wrap my brain around this because i've only been on here two years okay um so we have a contract with the city yes for administrative and legal services budgeting and finance okay so so there is budgeting allocated for general counsel now because it's safe to say it's part of that as part of the city's agreement and the transfer to the general fund yes

but it's not necessarily a set dollar amount for legal services, but yes, that is taken into consideration.

Okay. So if this board said we want to reshape the administrative organization of this, is that, um, how, how does that have to go?

Are you, are you asking if the funds could come from the cities? I'm from Miss Annie. Just one moment, please.

Again, I'm just trying to find ways to have legal counsel.

Thanks for asking the question.

Good morning, Amy Rodriguez, Director of Management and Budget. The transfer to general fund is an admin service charge that's calculated in a full cost study by a third party, and it's done in arrears. So it's essentially reimbursing for services provided in the prior fiscal year. So I don't think that would be an option.

So is there an accounting record of legal counsel. How much was funded on legal counsel expenses for last prior last year.

I did a very quick look and it looks like in F what. Oh I believe in FY 25 and again I think it's the look back year but FY 25 it was almost eighty five thousand dollars and then it increased into this into this current period. to at least $90,000. It may have gone over that, but I think we're in.

So, you know, again, looking right for today, no, but if we made a directive coming out of the suggestion we could predate to whatever a year from now is and say those funds will be, I mean, I guess you could pay the next legal counsel in arrears too. I mean, I don't know. I don't think they bill that way. Well, but in concept, the budget's there. So there is budget available for legal counsel if we choose to go that direction. Is that safe to say, Buck?

Yeah, it sounds like you were saying to amend the budget to,

reduce the the city allocation and and tag it to the council right and in fy 27 that's probably not possible because we're paying in arrears for fy 26 however for 28 there um there are um i think in almost all of the funds there is fund balance that i wouldn't rule out um especially if you're going to spread it the general council out across several different funds there there are options but First, we have to have some sort of cost estimate. Yeah, I understand. Thanks for your committee to consider us in town, out of town. How many hours a week do you think they're coming? Are you going to make them travel? Can they come in by WebEx and come up with some sort of cost estimate? And then we can move forward with the budget amendment for new special counsel, not the previous special counsel.

Okay, so there is a motion to create a subcommittee consisting of myself, Mr. Jimenez, and Mr. Filippillo to... Can you...

I'm trying to remember what it... To discuss, I guess, discuss possible special legal counsel as well as... general counsel to bring back to the type B.

Would that enable us to go ahead and start putting out an RFQ for proposals? You said there's very specific legalities around hiring attorneys.

No, I said the state law doesn't have any specific rules on hiring an attorney. So if there was an attorney sitting in that chair and he said, hey, we like that guy, you could propose to hire him. Um, but I just said that this, if, if, if the board wanted the city's assistance, we could do an RFQ and, and, you know, solicit an attorney for the board.

So you have options available to you. Okay. But then if we, if we don't do that and we bring forward proposals next meeting, um, those proposals would need to include a budget amount for that representation. Um, can you go over what other items would need to be included in those proposals?

Who?

Who?

What? Okay. How much? Is there a period of time?

Would the board want the city attorney's office to review the contract with the attorney?

Can you even do that in terms of the special?

Not in the special.

But you're speaking about if there was a general.

But further point on the confliction on general council needs.

Okay, who, what, how much, when? You said timeline?

Yeah. Is it open-ended? Is it for a set period of time? I'm assuming it's going to be a not to exceed. Would it be a not to exceed? What fund do you think it's going to come from in your budget? We'll We'd be happy to help you with that.

And currently we pay for our staff and legal services out of the general fund? Nope.

It's transfers to the general fund and each one of the funds.

You're speaking on business and economic development or streets or housing? Okay, so we would need to decide if we felt like we needed general counsel or special for all three pieces. Okay.

In this particular case, I would think you're looking for special counsel out of the Economic Development Fund 1146.

Okay, we have a motion and a second. Are we clear on what the motion is? Can you read that?

So it's a motion to create a subcommittee consisting of President Diana Summers, board members JJ Jimenez and Johnny Filipello to discuss and consider, I'm using hiring procurement of a special counsel and a general counsel. That's what I have. Is that okay? All right.

Are there any questions?

Yeah, one more question.

Mr. Filippello?

Are we able to include Jennifer in our discussions on that to help with telling us what we're... We'll help facilitate bringing it back to the agenda, getting answers from people that you need answers to, yes.

We're going to excuse ourselves from the conversation.

Okay, just trying, if we have questions on statutes and things, you can give us answers.

We will help you facilitate your conversation in bringing action back to this body. Okay. Yes.

Are there any other questions with that? All those in favor say aye. Aye. Any opposed say no. No. The motion carries. Okay, next is... And Mr. Jimenez has left the meeting, sorry. Yes, Mr. Jimenez had to excuse himself. Thank you for that. Next, I'm going to go to Section D, Executive Session Items. The Board will go into Executive Session on Item 1 per Texas Government Code, Section 551-071 and 551-087. We will return. All right, it is 1130. I'm going to reconvene the type B meeting. Moving on to item number two, this item is being withdrawn. So with that, we're going to move on to section G, executive director comments. Mr. Dice, are there any comments?

No comments today, thank you.

Seeing no further business, this meeting is now adjourned. Thank you.