We have a quorum, so we'll go ahead and call the December IDB meeting to order.

Confirmation of meeting advertisement.

Thank you, Maria.

We do have a quorum.

I will the minutes are in our packet, so I will ask for a motion for the minutes.

Great.

This is a resolution ratifying the chair's execution of exhibit B work letter agreement to a permanent sanitary sewer easement and temporary construction easement related to the home serve USA Pilot Corp Pilot Project with T Green Edwards and Judy A.

Edwards.

T G excuse me.

And I'm not sure who all is present here, but uh for this particular item on here, but uh this work letter agreement was uh signed by your chair at the request of the city attorney's office here last week.

We wanted to make sure it was on for ratification today.

The purpose for this work letter agreement was to cut off a uh I guess a uh a liquidated damage claim of fifty-six thousand dollars per day that we were trying to avoid in connection with a contract if there was not an easement that was allowed on this project, and we uh rushed through a temporary construction easement on this project, got it done, cut off and avoided $56,000 in liquidated damages per day.

So that was the issue that was involved, and uh uh the home served folks uh had the um I guess the this particular project that was ongoing in connection with this matter, and this was holding up that that pilot, and that's the reason it came before y'all.

So that's the reason it was involved.

Okay, okay.

Make a motion we approve the resolution.

Not second.

Okay.

All those in favor?

Aye.

Any opposed.

Great.

The motion passes.

Thank you.

Our next agenda item is um E2I2 project, a resolution authorizing the chair to enter into a contract for sale and purchase with the local board of trustees of the Lee Highway Church of God and um, excuse me.

Let me start over.

A resolution authorizing the chair to enter into a contract for sale and purchase with the local board of trustees, the Lee Highway Church of God in substantially the form attached for the purchase of the rail property at 7218 Hamilton's acre circle identified as tax map number 139 PC 007.04 and the amount of 580,000 and to execute all documents necessary to consummate the transaction and with closing fees not to exceed 10,000 for a total transactional amount not to see not to exceed 590,000.

Who can speak to that one?

I will.

Okay.

Um this uh particular um project on here uh is a contract for sale and purchase that that will access the property that is in a pilot currently.

Uh this is owned by the Lee Highway Church of God, and it's basically an easement area that would allow us to be able to uh uh get get into this area that is needed for uh I guess the sewer purposes that are in that area.

And Elizabeth, are you here to talk about it at all?

I am, yes.

Yes, ma'am.

So the purpose of um this purchase, we've been before the board before, it's to provide access to the the Lee Highway property that um the IDB already holds for the E2I2 project.

The existing entrance uses a culvert that is shared with the neighbor and is not um rated to withstand some of these larger vehicles that we need to get in there, and due to the upcoming FEMA changes, we cannot add in a new bridge without causing flooding downstream.

So purchasing this property allows us to have access to that pro to that project in perpetuity with the remaining um parcel that will not be used for um access potentially to be sold later.

It's a triangular shape, so they weren't interested in just an access easement, they wanted to sell the whole parcel.

And once again, the E2I2 project in this area is also another large tank.

Yes, correct?

It's a 10 million gallon wet weather sewage holding tank.

Yes.

So whenever it rains and is in a combined system, it would in part go there for treatment later on, it would be held there and then it would go out later on.

That's correct, yes.

Okay, and to clarify this is a permanent easement, not a temporary this is the purchase of that property property, okay.

What about the uh land or landowner right now that's uh the city is sharing what you call it the temporary easement?

Yeah, yeah, is he involved in this purchase he or she?

Um the current city um deeded access to the property is on the 7148 Lee Highway property.

We do not utilize that entrance because we can't get the construction equipment over it.

Um we have a temporary entrance right now, but we can't make that permanent.

This would be the permanent solution to get to that property.

Okay, and eventually this would become property owned by the city after the uh completion of the project.

It's it's in the process right now for the construction project, right?

That's correct, yes.

Okay.

All right, either the city or the the WW wastewater treatment authority.

It would be the city.

City okay.

Has the due diligence been done to make sure that this new property is going to be adequate for the vehicles that you need to get accessed into there?

Yes, we have done surveying environmental studies, and um we believe it's sufficient.

Okay.

Any other questions?

I'll make a motion we approve the resolution.

Second.

Thank you.

Moved and second it.

All those in favor?

I closed great.

So moving on to other business, we have a couple of discussion items.

The first is the reporting of the TIFF final audit report.

Good morning.

Honor and a pleasure to be here before you.

My name is Winston Brooks, Director of Economic Development and Entrepreneurship.

But I'm gonna give you a little bit of a an overview and then turn it over to Sharita for any uh questions or details she's uh on this uh audit that was done on the tax increment financing.

Um Chris McCullough, the county auditor, uh, did it uh produced a report uh a few months ago, and uh it was an audit of the tax increment financing agreements initiated by the city of Chattanooga and Hamilton County since 2013, conducted by the Hamilton County internal audit and dated uh up until October, as it was dated October 9th, 2025, and it looked at TIFFs from 2013.

Um it concludes that the program is generally achieving its primary goals of encouraging economic development and maintaining adequate internal controls, and the audit also identified some weaknesses that required some attention.

Definings reveal a lack of formal policies with Hamilton County and its industrial development board and a consistent um failure in project oversight, particularly in monitoring financial compliance or compliance with the um the agreements in place.

So some of the summary of the recommendations were to formalize policies and procedures, uh, enforce the compliance, improve financial oversight, and clarify objectives.

And so um to that point, the software that we've uh recently um that this board uh thankfully has approved, so called Civic Serve is tax increment financing software as well as other incentive software that will help us manage the the financial reporting and the compliance aspects of all these things.

So that's uh uh one leap uh giant step towards um helping manage this this project as these um come online and we get more and more several of them out there right now.

So with that, I'll turn it over to Sharita.

Good morning, board.

It's good to see everyone.

Let's see.

I will just walk quickly through this report that was emailed directly to you by the um county auditor.

And so basically, he reviewed all of the existing TIFFs that we have in place.

He covered um sort of when they were put in place, the amount of the TIFF, the amount of the capital investment, there were some recommendations which Winston just went over.

Uh moving forward, we will provide.

We currently provide an annual report to the IDB and the city council.

Uh that typically has been in more of a PowerPoint format where we basically have said here's the development, here's existing capital investment, here's the increment that's coming in.

Moving forward, we will touch on a few other items.

He did ask moving forward that we include in all of our reports sort of the purpose of the TIFF, whether it's meeting its initial sort of goal, why it was put in place, and then add those all of those other items into it from there.

And so he reviewed the process.

Um the recommendations on policy were mainly for Hamilton County and the Industrial Development Board of Hamilton County because they currently do not have TIFF policies.

City of Chattanooga does, as does the current the IDB here.

So they will they will have some policies coming forward.

These are our policies.

At some point, there will be a recommendation to come forward to both the IDB and the city council to modify our policies for transparency purposes.

It's it's this full multi-step process.

We're looking to eliminate some steps moving forward, but again, we will bring recommendations to the before to the board before making those those changes.

And again, it talks a little bit about the objectives of the report, auditors' opinions and findings.

And then just sort of recommendations, oversight, again moving forward.

When we put together a report, uh report to this board, and typically we do it at the end of every fiscal year.

So your next report will be around June of 2026.

And what we'll do is bring forward and incorporate some of the things that he asked for in this particular report.

And so again, this was this was sent to all the members.

We're happy to answer any questions you have about sort of our policies and procedures, and then we will start implementation in January of the new economic development software that this board approved.

Um so we look forward to bringing reports to you out of that new software when we start in 2026.

And that's kind of it.

An overview of that FYI item.

So there's no action that needs to be taken from this this board today on this item.

Questions?

Tereen, so you're saying uh if you look at page uh page eight, if you would, the second and third bullet points concern me especially.

You're saying the proposal or or what you're planning to do is address those in the spring.

Uh we're currently working to address those now.

And so we are currently in alignment on on all of those things.

That because it's a combined city-county report, there are there are places where because a county doesn't have policies, they're not in alignment.

We do have policies, so we are in alignment.

Okay, so like as far as the conflict that he he uh mentions with the Tennessee code, that's not applicable to us.

That's not applicable.

We are fully compliant with all state laws as it relates to our TIFFs.

Okay.

And what the third bullet point, um are we satisfactory from your standpoint?

We are that's the enforce annual compliance with certifications from developers.

I will have to look at that particular item.

I'm not sure what certification of developers means.

And so typically what we do is we ask for developer qualifications when they're making application, and that's to determine whether they're capable of actually following through on the TIFF.

And so, as you know, with TIP projects, they are supposed to be shovel ready, and what that means is they get the incentive, they should be ready to go forward.

So they should have the capacity and the qualifications follow through on the project.

So I'll have to figure out what that certification of developers means, but but we do vet developers that are applying for TIFS.

Well, he appears to say from my reading on page seven, there's a couple of recommendations uh towards the bottom.

It basically seems to suggest we're we're deficient in the sense we don't have a delegated individual that's ensuring compliance.

Of course, I know you've got issues with that characterization, but um that seems to be at the heart of what he's claiming.

Um so I guess just you will get can get back to us on that.

Yeah.

Yes, I will definitely do.

And so I'm looking at the recommend recommendation.

It says delegate an individual within the IDB of Chattanooga to review each contract and review financial reports to ensure compliance with agreements.

And so just as a heads up, we do work closely with our finance department, and historically, we have worked with Pinnacle Bank when they have been the financing arm of a project to meet with them on a regular basis to make sure all of the documents are being held, all of the invoices and the drawdowns are being reviewed, all of those kinds of things.

So historically, we have we have done that piece of the project within city staff, and then working with finance on that.

Jareen, let me let me ask one other question if Madam Chairman Woman doesn't mind.

And that is with other industrial development boards in the state of Tennessee.

You correct me if I'm wrong.

I think Nashville and Memphis, the IDBs both or the IDB's equivalent, have employees of the IDB.

Is that correct?

That is correct.

Is that something you can envision from your experience with the with the Chattanooga IDB that we need to consider?

I think the IDB should consider having a staffer to oversee project.

If not a staffer, then at the very least, a project manager that's assigned for either TIFFs as a whole or project managers for each of the each of the TIFF projects.

Okay.

So currently that role is being filled by either city engineer and his team as it relates to the baseball stadium.

It's currently being filled with economic development as it relates to the Tubman project.

It's currently being filled.

Um if there's anything housing related, it's it's our housing team is monitoring housing projects that are following within TIFF district.

So it's kind of scattered right now with everybody kind of overseeing it, recognizing the common threat is always our finance team.

Doesn't does Knox does the Knoxville IDB have employees?

I I do not know the answer to that.

But I do I do know that Nashville and Memphis have have full-time staff.

And I know the like city engineer managed the Enterprise South project.

That's correct.

Yeah, okay.

It goes way back to staffing it out to city staff.

One thing I noted, I think the TCA comments about the county IDB, not necessarily us, but it it's kind of a confusing report because it's it's from the county.

A lot of it's about the county IDB or then some comments are this IDB.

It is confusing.

Madam Chairwoman, I do think that's something we need to consider going forward.

Um as far as having one person employed by the IDB that looks at all of these and um takes the lead there.

So anyway, just something we need to consider, I think.

Just need to have enough funding to be able to do that.

Right.

Yeah, right.

And so current currently under each of the TIFFs, there is an administrative fee, and that fee could fund a position.

Um that would oversee TIFS if the IDB wanted to look into that.

And that person would be on your team, I'm assuming or to be determined.

Not sure how that would how that would work.

I would have to ask the city attorney how that the city attorney would say that there are separate corporations involved here, so it would be an employee of this corporation.

Correct.

Yeah.

But considering the the number of pilots, please where the IDB is holding property, holding title to property under pilots and the TIFFs where the IDB is holding the funds in the TIFF for the TIFF accounts that are set up with the IDB, it's something worth considering moving forward.

I would also argue we can increase the admin fee to cover it.

Yes, you could.

They'll pay the fees, they want the TIFFs.

Yeah.

Yeah.

Perfect.

Um, how would you like for us to would you like for staff to look into that, make some recommendations the first quarter?

Yeah, that would be great.

I think it would be, yeah.

Please.

Okay.

And did you want me to address the uh the enforcement of the compliance and certificates and thank you again, Winston Brooks?

Um, just wanted to provide a little bit of context around the uh statement about the enforcement of annual compliance.

And so that has a lot to do with going back and looking at the development agreement and making sure that those agreements are being lived up to, and if there's any penalties that need to be um addressed because of something not being done, that would be the time that you would enforce that too.

So just wanted to follow up on that.

Okay.

Um just making a note here.

So we'll maybe add a discussion item for future early 2026 um information that will come be forthcoming on recommendations.

Perfect.

If you would if if it's okay with the board with the chair, if you could give us until February to come back with something, sounds good.

That would give us time to look into how the other municipalities across the state are handling their staffing, what that staffer's doing, the responsibilities, the reporting, all of those kinds of things.

That gives us a little bit of wig more.

Sounds good.

Thank you.

Um one other question on here.

Um just trying to make sure from the page on here, Sharita.

Does that mean that this board doesn't owe as much money to the IDB investor LLC now as we thought we did?

On which one?

Uh the IDB, and the based upon the TIFF on here.

It looks like it's a reduced amount, at least the beginning balance uh was reduced, and the amount that that is outstanding, at least as of 430 24 on that one page sheet, it's that uh on page nine of the document.

Yes, and so um economic development team, um city finance team, and the county auditor met to discuss what appeared to be a discrepancy.

Yes, uh, that was related to that Black Creek TIFF, and that was that was resolved.

Okay.

So do we not owe them quite as much more because they've already been paid?

I look uh can we get over to that page nine on there that'll help her.

Yes, I'm on page seven, is that page seven?

Yeah, that's seven there, but if we can go over to page nine, hey Ricky, yeah, all right.

Page nine, yeah.

Thank you.

There we are.

Yeah, that that's what I was looking at because it says uh eight million six nineteen instead of nine million eighty-nine.

I am not able to answer that, only because this is coming from the county auditors report.

Yep.

Phil, I think the issue the calculations are slightly different for the county and the city, and I think it was an issue on the county's calculation.

I think that's another one of those where that's related to the county, not the city.

But I I'll follow up and make sure, but I'm pretty sure if I'm remembering our meeting with the auditor, that was specific to something within the county's calculation that wasn't being treated correctly.

So eight eight million six is less than nine million and eighty-nine, that's what I was wondering about.

So does that mean that we owe them less money on the TIFF?

We owe them less than we originally did because we have paid some of it over the last 13 years.

Yes, that's what I was thinking.

Yes, that's correct.

That'll be important whenever this goes on, and and hopefully the TIFF amount increases with more development that they have on top.

That's okay.

That's the hope.

We're making they've they've hit a hang up up there, but I think we're working through it.

So big houses cost more.

Yes, I do.

All right, good.

Thank you.

And just real quick, back on the employee conversation.

If I was to do my own research, Knoxville and Memphis are those the two cities we want to know.

Nashville.

Nashville, Memphis.

Nashville and Memphis.

Yes.

And Memphis's IDB is called something different, right?

Yeah, Jones.

Yeah.

The edge.

I'm familiar with that.

Okay.

How many TIFFs do they tip to go through each year?

Oh, I do not know off the top of my head.

We do know, for instance, there are 35, roughly 35 active TIFS that are in Knoxville.

Um, there's a larger number, that's similar number that's in Nashville.

Okay.

Uh Memphis also has seven different types of TIFFs.

So ours is it only an infrastructure TIFF.

Memphis has there's a grocery store TIFF.

There they're different types of TIFFs that they have based on kind of what communities need.

They're very specialized.

Sure.

Okay.

But they have the staff to do that.

Yes.

Yeah.

Great.

But I'm happy to provide that when I come back, just an overview of the different the different IDBs across the state and the types of tools that they have.

Sure.

And then the associated staffing based on those tools.

I mean, I know Edge is a whole Morgan isn't like a whole company.

Exactly.

Okay.

All right.

I'll I'll do some research myself.

Okay.

Our next discussion item quarterly project update number two by Wastewater Department and Jacobs Engineering Group, W 20-027-101.

MBEC class A power progressive design bill.

Anybody here discuss that one?

We just lost our wastewater person here just a minute ago.

Okay.

Well.

Do we want to just leave this on here?

I don't know if they're with that project, actually.

That person was.

Put it on the next agenda.

Yeah.

Yes.

Specifically for moccasin bend.

If I'm reading these letters and everything right, this is for all the modifications of Mox and Bend.

Yeah.

And the I guess the concern at Mox and Bend is actually being able to make things into pellets with a high intensity heat, and that's the purpose for the pilot understood for that area on here, or at least us having some sort of ownership interest in that property while that goes forward.

And that is a new construction project design going there, but um as far as their timing, I'm not sure how how quickly uh they they need that going here.

We just have a a document that is attached on here that's just uh showing that it's part of the consent decree program, and usually if there are issues that uh uh have to be done within a certain time, they they would let us know.

It looks like the phase one of the projects August the third of 2026, uh and then substantial completion July 3rd, 2029.

So it's off about four or five years.

So um the action there there says upcoming board action request, none planned at this time on that sheet, but um maybe we can go off one month.

consent decree program and usually if there are issues that uh uh have to be done within a certain time they they would let us know it looks like the phase one of the projects august the third of twenty twenty-six uh and then substantial completion july third twenty twenty nine so it's off about four or five years so um uh the action there there says upcoming board action request none planned at this time on that sheet but um maybe we can go off one month yeah put it back on for next time yeah just have it on the next agenda okay anybody have anything else before we adjourn I think so was this also on the last agenda without I I thought I just remembered it being on our last agenda I agree well it was yeah no one was here to speak on it do we know who speaks who would speak on our Kins are kind of wastewater yes Maria will notify Mr.

Hans thank you Maria it must be going good he's busy well if there's nothing else we'll adjourn today's meeting thank you very much and see my don't have a hammer exactly