Economic Development Grant Agreement
City of Salina
Economic Development Grant Offer and Agreement
Offer
This Grant Offer and Agreement entered into on the ''30 day of November, 2006
is made by and between the City of Salina, Kansas, 300 West Ash Street, Salina, KS, (the
"City") and Raytheon Aircraft Company, whose address is 2656 Scanlan, (the
"Grantee").
WHEREAS, the Grantee has submitted to the City an application for grant of City
economic development sales tax funds for facility improvements and major equipment
purchases for the addition of primary industrial jobs; and
WHEREAS, the City's Salina Economic Development Incentives Council
(SEDIC) reviewed Grantee's application and recommended to the Salina City
Commission the granting of$130,000 in City economic development sales tax funds for
Grantee's project; and
WHEREAS, on August 7, 2006, the Salina City Commission approved the
expenditure of$130,000 as an economic development grant for Grantee's project
consisting of the following:
Building No. 626 modifications and the purchase oftools and equipment (the
"Project").
The Project is described in more detail in the attached application letter submitted by
Grantee, Excerpt of Minutes and copy of Resolution Number 05-6220.
NOW THEREFORE, in accordance with Resolution #05-6220 and pursuant to
the City's budget and appropriation authority, in consideration of the Grantee's
acceptance of this offer and the benefits to accrue to the City and the public from the
accomplishment of the Project and compliance with the assurances and conditions as
herein provided, the City hereby offers and agrees to pay $130,000 as the City's share of
allowable costs incurred in accomplishing the Project.
This offer is made on and subject to the following terms and conditions:
Conditions
1. The maximum obligation ofthe City under this Offer shall be $130,000.
2. Payment of the City's share ofthe allowable project costs as detailed in the
Grantee's attached application will be made pursuant to paid invoices submitted
to the City by Grantee. Grantee may request multiple drawdowns of grant funds.
Grantee shall request Salina Airport Authority certification as to the completion
or percentage of completion of Building No. 626 modifications. The Grantee will
also request Salina Airport Authority certification that eligible tools and
equipment have been delivered and are at Grantee's leasehold premises.
3. The Project shall be complete within twelve (12) calendar months from the
execution date of the agreement.
4. Grantee shall use every reasonable effort to meet the job creation estimate
provided to the SEDIC on July 26, 2006.
5. Grantee agrees to maintain all insurance coverages as required in its March 1,
1987 Lease Agreement, including all amendments with the Salina Airport
Authority and continue to name the Salina Airport Authority and City of Salina as
named co-insurers.
6. The official contact for the City is:
Lieu Ann Elsey
City Clerk
300 West Ash, P.O. Box 736
Salina, KS 67401
785-309-5735 (0)
785-309-5738 (F)
LieuAnn.Elsey@Salina.org
7. The official contact for the Grantee is:
Mike Hammond
Director RAC Salina Division
Raytheon Aircraft Company
Plant #1
9709 East Central, P.O. Box 85
Wichita, KS 67201-0085
785-452-0342
mike hammond@rac.ray.com
The Grantee's acceptance of this offer, ratification and adoption ofthe project
application incorporated herein shall be evidenced by execution of this agreement by the
Grantee, and the offer and agreement shall comprise a Grant Agreement. Such Grant
Agreement shall become effective upon the Grantee's acceptance of the offer.
By:
CilYOfSalinaa 4
~. C/_
J!son A. Gage
City Manager
By:
2
Acceptance
The Grantee does hereby ratify and adopt all assurances, statements,
representations, warranties, covenants and agreements contained in the project
application letter and incorporated materials referred to in the foregoing Offer, does
hereby accept the Offer, and by such acceptance agrees to comply with all ofthe terms
and conditions in the Offer and in the project application letter.
Executed this'30 day of November, 2006.
Raytheon Aircraft Company
..
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(name)
(title)
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To: Timothy F. Rogers, A.A.E.
Executive Director
The purpose of this letter is to elaborate on the meeting we had several weeks ago and to
respond to your letter dated May 31, 2006. In your letter, you mention the Salina
Economic Development Council has funds available to help Raytheon Aircraft Company
move work to Salina. The decision to move work has been made and by the end of July
twenty (20) new jobs will be in Salina. The issue we now face as a company is that we
need to move additional work quickly. The quicker we can move wor~ and our ability to
do it cost effectively will be the driving factors for additional work in Salina. I would be
glad to discuss that in person with you or the council. Below I have briefly described the
items and amount of money we believe we need to move additional jobs to Salina by year
end. That added to the twenty (20) that are currently moving would put the Salina
Operation's work force at a level above what it was before the Plastic business was sold
and moved from Salina.
Our current plan is to move a sub-assembly operation back into Building 626 and expand
operations within our current manufacturing buildings. This move would allow for the
space necessary to handle the additional jobs, as well as future growth. The issue is that
most of the space within these buildings has been used for storage for four (4) years and
needs to be updated. A new compressor is necessary at a cost of $60,000. Offices,
reslrooms, employee break area and to bring the building up to current safety
requirements will cost $70,000. Tools and equipment for new employees will cost
$35,000. Movement of machines and tools from Wichita will cost $50,000. Capital
investment in transportation tools and dollies for assemblies to be transported to Wichita
$70,000.
I would be happy to discuss these plans and the associated cost in person if necessary.
07/14/06
Facility Improvements/Modifications required due to increase in
headcountlworkroad for the Raytheon Aircraft Facility SaUna Division.
Compressor $51,192.00
--
8626
Restroom Restoration
Mens and Ladies $59,966.00
8626
Floor repair $10,398.00
8626, 655, 614,
713
Office restoration $3,137.00
8655,626
8655,626
Heating/Cooling $35,051.00
Repair lower roof 8626 $22,541.00
8626
Electrical $11,345.00
Overhead Crane 8713 $77,691.00
8626,655,614
8713
Tooling Dept. insulation $16,488.00
for occupancy
8713
Facility Overhead Door
~eplacement $49,706.00
Steel Siding "Nil end 626 $51,656.00
Insulation and windows
"Energy" Cons.
8626,713,723
Steel Doors $30,874.00
w/ panic hardware
Steel siding and $73,941
Insulation
Facility
8655
EXCERPT OF MINUTES
Salina Economic Development Incentives Council
July 26, 2006
3:00 p.m.
3. Action Items
a. Request for facility improvements/major equipment funding from Raytheon
Aircraft Company.
MOTION: Moved by Marrs, seconded by Britegam, to recess into executive session for five minutes to
discuss with the City Attorney a matter subject to the attorney-client privilege for the reason
that public discussion of the matter would waive the privilege. Aye: (6). Nay: (0). Motion
carried.
The Council recessed into executive session at 2:12 p.m. and reconvened at 2:17 p.m.
MOTION: Moved by Divine, seconded by White, to authorize the Council to enter into a Proprietary
Information Agreement between Raytheon Aircraft Company and authorize each Council
member to sign such agreement. Aye: (6). Nay: (0). Motion carried.
Jason Gage, City Manager, explained the request and the Council's role.
Mr. Gage and Tim Rogers, Salina Airport Authority Executive Director also informed the
Council of the use of an executive session to discuss confidential data relating to financial
affairs or trade secrets of the corporation.
MOTION: Moved by Britegam, seconded by White, to recess into executive session for 20 minutes to
discuss confidential data relating to financial affairs or trade secrets of the corporation. Aye:
(6). Nay: (0). Motion carried.
The Council recessed into executive session at 2:25 p.m. and reconvened at 2:45 p.m.
MOTION: Moved by Divine, seconded by White, to recess into the current executive session for an
additional five minutes. Aye: (6). Nay: (0). Motion carried.
The Council recessed into executive session at 2:45 p.m. and reconvened at 2:48 p.m.
Mr. Gage summarized the City of Salina resolution outlining the Council's role.
Mayor Marrs also outlined the funding request for the Council.
MOTION: Moved by Britegam, seconded by Walle, to recommend that the Council forward the request
to the City Commission for approval of the request to provide a facility improvement / major
equipment funding match to Raytheon Aircraft Company in an amount not to exceed
$130,000. Aye: (6). Nay: (0). Motion carried.
Commission
Action #
CITY OF SALINA, KANSAS
REGULAR MEETING OF THE BOARD OF COMMISSIONERS
August 7,2006
4:00 p.m.
The City Commission convened at 2:30 p.m. in a Study Session on the 2007 Budget - Sales Tax and Health
Clinic. The Regular Meeting of the Board of Commissioners was called to order at 4:00 p.m. in Room 107, City-
County Building. A roll call was taken followed by the Pledge of Allegiance_and a moment of silence.
There were present: Mayor Donnie D. Marrs, Chairman presiding; Commissioner Alan E. Jilka; Commissioner
R. Abner Perney; Commissioner John K. Vanier II
comprising a quorum of the Board, also present: Jason A. Gage, City Manager; Greg Bengtson, City Attorney;
Lieu Ann Elsey, City Clerk
Absent:
Commissioner Deborah P. Divine
ADMINISTRATION
(8.6) Consideration of a funding request from Raytheon Aircraft Company for facility improvements and
major equipment.
Jason Gage, City Manager, explained the request.
Mayor Marrs noted the Salina Economic Development Incentives Council's recommendation.
Tim Rogers, Salina Airport Authority Executive Director, responded to Commissioner Vanier's
question regarding the disposition of the company.
Mr. Gage then noted the resolution that created the council and guidelines of approving the request.
06-7315
Moved by Commissioner Vanier, seconded by Commissioner Jilka, to approve the request to provide
a facility improvement / major equipment funding match to Raytheon Aircraft in an amount not to exceed
$130,000. Aye: (4). Nay: (0). Motion carried.
ADJOURNMENT
06-7320
Moved by Commissioner Jilka, seconded by Commissioner Vanier, that the Regular Meeting of the
Board of Commissioners be adjourned. Aye: (4). Nay: (0). Motion carried. The meeting adjourned at 5:31 p.m.
/s! Donnie D. Marrs
Donnie D. Marrs, Mayor
[SEAL]
ATTEST:
/s/ Lieu Ann Elsey
Lieu Ann Elsey, CMC, City Clerk
oregoing IS a true correct excerpt of the action taken by the Governing Body at its regular meeting on
the funding request from Rayt eon Aircraft Com any for facility improvements and major
Page I
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RESOLUTION NUMBER 05-6220
A RESOLUTION ESTABUSlDNG THE SALINA ECONOMIC DEVELOPMENT
INCENTIVES COUNCIL.
WHEREAS, that in 2004, Salina voters approved a special one-quarter cent (1/. cent) sales
tax and 12.5% of the revenues from the special sales tax were restricted to the establislunent of an
economic development fund managed by the City of Salina; and
WHEREAS, that in October 2004, the City Commission unanimously approved an
initiative proposed by the Salina Airport Authority and the Salina Area Chamber of Commerce to
provide incentives to new and existing manufacturing and primary businesses; and
WHEREAS, that the City Commission formed an ad hoc committee led by the Mayor and
Vice Mayor to fw1ber explore the protocol for expending the economic development funds, which
then resulted in the establishment of a six member Salina Economic Development Incentives
Council. SO NOW THEREFORE,
BE IT RESOLVED by the governing body of the City of Salina, Kansas:
Section 1. Establishment. That the Salina Economic Development Incentives Council
(S.E.D.I.C.) is hereby established.
Section 2. Responsibilities. The responsibilities of the S.E.D.I.C. are to:
(a) Develop and recommend guidelines, policies and processes to the City
Commission for grants from the allocated special sales tax funds for incentives to
new and existing manufacturers and primary businesses for the purpose of
enticing them to relocate or expand capital and/or human investment in
Salina/Saline County in order to provide a stimulus to the local economy;
(b) Review applications and make specific recommendations to the City
Commission regarding grants from the sales tax;
(c) Make recommendations to the City Commission, County Commission and/or
local government bodies regarding other public economic development
incentives; and
(d) Provide regular reports to the City Commission, County Commission, Salina
Airport Authority Board of Directors and the Chamber of Commerce Board of
Directors regarding economic development projects receiving incentives.
Section 3. Membership. The S.E.D.1.C. will be made up of the following persons:
(a) Mayor;
(b) Saline County Commission Chair;
(c) Salina Airport Authority Board Chair;
(d) Salina Chamber of Commerce Board Chair;
(e) Two citizens appointed by the Mayor and the City Commission; and
(t) Citizen appointed by the Saline County Commission
The citizens appointed by the City and County shall serve for terms of two years and shall be
eligible for reappointment in accordance with Resolution No. 90-4242. Initial city citizen
appointments shall be staggered to expire February 2007 and February 2008.
Section 4. Organization. The S.E.D.I.C. chair shall be the Mayor and vice-chair shall be the
Saline County Commission Chair.
Section S. Administration. Administration of the S.E.OJ.C. shall be as follows:
<a) Meetings are to be held at least quarterly, and otherwise as needed for related
projects, projects, programs and funding applications;
(b) Professional staffing for the S.E.D.I.C. to be provided by the City Manager,
Airport Authority Executive Director and Chamber of Commerce President;
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(c) Administrative/clerical support shall be provided by the Chamber of Commerce;
(d) All meetings/records are covered under the Kansas Open Meetings Act and Open
Records Act as specified by State law; and
( e) The use of local organizations and other resources is highly encouraged.
Section 6. Miscellaneous. Miscellaneous considerations regarding this council are as
follows:
(8) For purposes of the S.E.D.I.C. "primary business" includes manufacturing,
processing, interstate distribution, research, or service sector businesses which
derive a minimum of90% of revenue from sources outside Saline County;
(b) Sales tax grants are to focus primarily on human capital investment in training
and capital investment in plant, property and equipment, with priority given to
human capital investment in training. Also, it is important to ensure that existing
primary businesses remain eligible for grant funding; and
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(c) A program performance review is recommended in the fourth quarter of 2006.
This will allow for a full year of operation and provide an opportunity to make
any adjustments deemed necessary for the remaining term of the special sales tax
funding.
Section 7. Effective Date. This resolution shall take effect from and after its adoption.
2005.
^""p"d by "" B""'" or Co=;,","= "'" ';'""~LY or "".1<<,
Deborah Divine, Mayor
[SEAL]
ATTEST:
~Ckd
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Section 10. That for the pmpose of providing funds to pay the cost of such improvements
until honds can be issued therefore, the Mayor and City Clerk be and they are hereby authorized to
proceed with the issuance oftemponuy notes for the City of Salina, Kansas, as provided by K.S.A. 10-
123 and 12-6a04, not to exceed the aggregate provided by law. Such tc:mponuy notes maybe issued by
Resolution from time to time as required during the progress of the work on the improvements herein
recited. Such temponuy notes shall be in the form and executed as provided by law.
Section 11. That the City Clerk is hereby authorized and directed to make progress
payments to the contractors for materials furnished and for labor performed under the contract when
I estimates therefore are presented to himlher which have been properly certified by the City Engineer,
so long as the aggregate payments do not exceed the total contract price.
Section U. That the City expects to incur capital expenditures on and after the date of
adoption of this Resolution in connection with such iinprovi::l11ents, and intends to reimburse itself for
such expenditures with the proceeds of said bonds or temporary notes in an amount which may
aggregate a maximum of$553,03 7, including the cost of issuance and interest on temporary financing.
Section 13. This resolution shall take effect after its passage and publication once in the
official city newspaper.
- ....",............ "'" 12. dayOf_~ ~
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{SE;4J.} Deborah Divine, Mayor
ATTEST:
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