Minutes approved for our January 5th meeting.

Um I will entertain a motion for minute approval.

Thank you.

Second.

Second.

All those in favor?

Aye.

Now I'll recognize any um anybody wishing to address the board.

Is there anybody here this morning looking to address the board today?

Okay, thank you.

We will move into our first resolution.

A resolution ratifying action taken by the industrial development board chair and city finance officer to execute a management representation letter for the auditor of Anderson.

Haterson and McCullough.

PLLC for fiscal year ending June 30th, 2025.

JMCPAs.

We'll keep this very brief and very high level, but uh before we walk through the details, just give a quick high overview of the 2025 audit.

Uh operations were pretty pretty in line with what we would would have expected with 2024 biggest increase is 28 million dollars for the E12 or E2I2, I should say, uh uh initiatives.

Um so there's an increase in revenue in that.

But uh outside of that, like I said, operations consistent from year to year.

Uh overall good news to report.

Uh audit came back clean with no findings, no internal control issues, and no compliance concerns.

So uh I'll turn it over to Garrett to go over our required communications.

Okay.

So I'm Gary Williams with HHM.

Like you said, our uh audit report, we had a clean opinion, which is the best opinion you can have.

We didn't have any uh significant deficiencies or material weaknesses noted during the audit.

Um our audit is the purpose of it is for us to make sure the financials are materially correct.

Um so that is uh we look at transactions and make sure uh for the most part everything's in line with what we'd expect.

Um significant accounting policies.

Uh those didn't really change from last year, those are all in note one.

It's got a million paragraphs in there with everything for the IDB.

Uh accounting estimates, we look at estimates to make sure those are reasonable.

Um there was no significant uh estimates noted.

Uh management accounting staff, we had no issues working with uh the accounting department.

Um always happy to work with them.

Uh and they were very helpful in getting us what we need to get our audit done.

Uh we weren't aware with any consultations with consultations with other accountants during our audit.

We had no uncorrected misstatements during the course of our audit.

Um we were not aware of any fraud or illegal acts throughout the audit.

Um that's good.

It's always it makes these conversations a little more interesting.

Uh but no, that was good.

Um and then we really didn't have any significant significant matters uh that we discussed with management during the audit.

So overall it's a pretty boring audit.

It went well.

We got it done much sooner than typically uh we have it done, so we're happy with that.

Um nothing else really to know.

If there's any questions about any of that happy to answer, and I just want to add one thing, but Weston Porter, CFO for the city of Chattanooga.

The resolution is related to uh the management representation letter.

And so with that is it's our representation, uh, the board and city finances.

We and Eleanor manage the books for our for the IDB, our representation to HHM that says we provided you everything you needed, we didn't have any disagreements.

It's pretty standard language, it's required by auditing standards that they have to go through.

And it's just the board's representation to the audit firm saying we've given you everything, we haven't held anything back, we are not aware of anything that you need to be aware of for this audit.

And so it's something that has to be signed every year, and that's what the resolution is.

It's you're you're executing that representation letter giving it to them.

Okay.

Yeah.

Does this report need to be filed with the state in the comptroller's office as well?

It has been.

It's already been filed.

Yes.

All right.

Good.

Questions for HHM.

No.

So it looks like we just need to take um entertain a motion for the resolution of the management representation letter, and then we've heard the presentation of the audit already.

Motion.

Second.

All those in favor?

Any opposed.

Thank you.

Thank you.

And there were no questions about the audit report, correct?

Anybody?

Okay.

Thank you, H H M.

Thank you.

Um, moving to the next item, uh, quarterly project update for number three by Wastewater Department and Jacobs Engineering Group, W 20027101, MBEC, Class A Power Progressive Design Bill.

Uh good morning.

My name is Mark Heinzer.

I'm the administrator for the wastewater department.

Uh so we've got the two projects uh that we're doing quarterly updates on this morning.

And the one is the uh E2I2 uh wet weather storage facility project.

That project is is progressing well.

We are a little over halfway done with it now.

If you've driven I-75 uh near the split uh at I-24, you've seen some tanks going up over there.

That that's what this project is.

And that uh again, that's going to uh reduce uh sanitary sewer overflows during wet weather events.

So the project is progressing well.

We are on schedule budget-wise and schedule-wise.

Uh the other project, the Class A Power Project is a project that is located at the wastewater treatment facility, and that is an overhaul of some of the processes there, both the water treatment as well as the biosolids treatment.

Uh both processes are getting are getting overhauled and upgraded with technology and and uh uh management.

So that project is very early on in the in its phase.

So right now we've uh just completed the basis of design report.

So uh in the fall we went through the uh analysis of alternatives.

Uh we selected some alternatives to then take to that next phase of development of design.

So that report we received the basis of design report uh this past week, and we are currently evaluating that, and we will then proceed into the design phase of that project, and that is a little bit behind schedule because of the alternatives analysis took longer than we anticipated, but it is still tracking uh to be completed within the overall time frame of the project.

And uh that as far as the budget on that one, we're still early on, so there's been no budget issues yet.

The construction phase is when we'll be looking harder at the budget.

There are updates for both line seven and eight.

Are there any questions for either one of those?

The the first project you mentioned.

Um, is that the one that's what is it, 153 million plus do you know at this point how many local contractors uh how much business they've gotten out of this project so far?

I don't have a number for that.

Uh there's some local consulting firms that are involved at the construction side.

I couldn't tell you I don't have that breakdown, but I can try to look into that for you.

Yeah, I'm I was just curious out of 153 million, how many local contractors are getting any of that 153 million?

Um closing, of course, ultimately how many local workers are working on the side.

I know I think Lawson Electric is and they have some local people, but I'm also uh Brassville and Gory, I mean, they're out of Birmingham, right?

Um and I'm aware I think there's one uh uh rebar installation company that's from out of town that's got workers out there, and that's that that's okay.

I just think uh in the future, certainly on an ongoing basis, we as a as a body and board need to be mindful of local contractors and local jobs.

So um if you would yeah, please look into that uh as far as what the expenditure is thus far out of that 153 million and how many has gone to local contractors, if you would.

Certainly, yeah.

Thank you.

Also, one thing uh to that is most of this is concrete, right?

Correct.

So all this concrete's being sold.

That's a big line item in here.

So if you look at the percentage of construction, I'd say that they're actually using quite a bit.

I've had one going up near my house that I actually had a friend working at, he was an inspector, and we talked and I I've seen quite a bit of involvement.

Just I don't want to speak for Mark by any means, but just what I've seen, and just the actual local suppliers.

If you take concrete and this whole thing's made out of concrete, they're not shipping that in.

They're making it here and buying it here.

That's local truck drivers, delivery drivers, coordinators, and stuff.

So I'd say there's a pretty good bit, Mark.

Just we'll try to quantify.

So that'd be good if so.

Just food for thought.

Right.

Big one.

Thank you.

I did have a quick question.

Um you said that the alternatives analysis took longer than anticipated.

Was there any specific reason for that?

It's one of those projects where there's a lot of different ways you could go.

So trying to really look at the different pros and cons of each of those alternatives took a little bit longer.

You know, there's there's no like perfect answer for some of the stuff.

Uh so trying to balance the budget with the end product is really where we we had to take a little extra time to make sure we got it right.

Glad that we're so thorough.

Thank you.

Mark, looks like you're 55.74% complete on the storage tanks.

Is that right?

Correct.

So we're close to halfway done at least, just a little over halfway done.

And yeah, we're we're looking good on that one again, both budget and pro and schedule-wise, we're looking good there.

And only 25% on the other project at Marks and Ben right now, and that's just on the design portion.

That's right.

That's the design part, yeah.

Okay.

Thank you.

Thank you.

Our next item is an overview of purchasing of the purchasing process for civic um civic serve economic development software.

Good morning, board Sharida Allen, senior advisor for economic and workforce development here at the city.

Um, this item is just an update and a follow-up to our last conversation related to the city staff bringing an item in October to this board for financial approval.

That was for Civic Serv economic development software.

It was 44,000.

That money came out of the economic fee payments for pilots.

Um, we did have the money in the budget.

My apologies.

That that 44,000 actually came out of an administrative fee that we put on all TIFFs, and so we use that fund to fund this particular item.

Um, there were questions around it.

Um, I will say staff neglected sort of bringing forward a full packet when we brought that item.

We simply brought an overview of the software and then asked for you to fund it without explaining the process.

So this is just an overview of the process.

So typically what happens, and that may be a little difficult to read, but on software purchases, what happens is historically we have been tracking all of our economic development projects on spreadsheets.

So that for instance, if you're asking for a report on a pilot that is from 2008 or 2010, we're pulling into historical spreadsheets to for that data.

Um, it's the same with TIFFS and pilots, uh TIFS.

We're actually every TIFF has its own spreadsheet, and that's how we're tracking that.

The goal for us was to pull all of this into one centralized relational database that also has a public-facing interface with it.

Um we then went to our IT department and said, we're looking at software, we can no longer track this in spreadsheets, multiple spreadsheets, um, help us out.

So this is a project for anything that's related to software purchases.

It has to go through our I our information technology team.

They essentially meet with us internally, they ask us what we're looking for, they then provide us with a worksheet.

We complete that worksheet, they go away, and then what you see circled is the research and discovery.

All of that happens within the IT department because they're looking at whether the software is compatible with existing systems, is it secure?

Is it safe?

Is it compliant?

All of those other pieces, they then come back to us with with recommendations, and based on the those recommendations, we then go through the process of having sort of demonstrations, online demos, or face-to-face demos with the appropriate vendors that would be suitable for the software.

So that those are the two items that we're looking at today.

The research and discovery and then the vendor and and scope review.

In your packet, I included all of the historicals related to that.

And so within your packet, you will see on roughly pages nine and 10 an overview of all of the different vendors that were that were reviewed before we got to the selection of Civic CERN.

And so that review, there's a score sheet.

There's also just an evaluation of did the vendors meet or do they meet all of the requirements that were put forward?

And then based on that, we move forward.

Some of those vendors were local that were reviewed, uh, some were not.

And then as an aside, the finance team did hire someone recently who's who is going to go out and make sure local vendors and local service providers are registered to do with the business with the city so that they're within our database as we as we move forward.

So high level, that's the process that we undertook.

You have all the documentation in your packets.

Um I'm not going to review each vendor individually.

I don't think that's necessary at this point.

A lot of them had some strong points, not all of them met the requirements that we needed for this particular software that we're looking for, and that's how we we landed on Civic CERT.

So moving forward, staff will provide more backup and documentation on the front end before we ask you to finance these items.

Any questions?

Sharita, this will help you get the information that we need to Henderson Hutcherson and to the com trolller each year, will it not?

It it will.

It will be hopefully the press of a couple of buttons.

So we're looking forward to that.

Have you been able to speak with anyone that uses this program currently, the civic serve program, like as a reference for its use?

We we did, yes.

And so this the particular program that was selected is it was based on it being designed specifically for pilots and tips.

So instead of just being sort of a contact database at the end of the day, it really and truly is pilots tips, uh the entire life cycle.

So applying the application piece, sort of the marking piece, the application piece, sort of the vetting, all of the different approval steps that happen between four different legislative bodies, the tracking, the monitoring, and then reporting both locally and then reporting up to the state.

So all of that will be I'd like to say seamless.

We're in the process of migrating data now.

I know it's I see Mr.

Rogers there.

Yeah, we're hoping it will be seamless, and we're working on that.

Yeah.

But have you talked to anyone that uses it currently?

This program, like any other municipalities?

I have not, no.

Oh, my colleagues.

I was just curious how they liked it.

Yeah.

Cool.

Okay.

So my colleague Winston Brooks in our economic development team actually led this project.

So he did speak with users of this particular software program and others.

Okay.

Any other I guess comment and I think the whole issue, and I think if finance has someone trying to get local vendors, that might solve the problem because the pool will be um more low, at least including locals.

And I think it wasn't necessarily that we're going to pick somebody just because they happen to be in Chattanooga.

It still has to fit.

Correct.

But I think because it was under 50,000, it didn't go through an RPF, so it wasn't, unless you were watching these meetings, they did it wasn't necessarily a call for vendors, and so I think that's where that particular vendor I don't believe is on this list.

Um, and so I think of the ones that they found in IT.

And so I think um I think that was just the concern.

Hopefully, if there's more of an effort to make sure that we get some folks that have kind of gone through some of the hoops to know that they're they're willing to be considered by the city and um that that'll help.

But that was I think that's where and I could I can see how it went the way it did.

I don't think it was um I don't think there was anybody that did anything particular, like was trying to not consider that vendor.

It just you know things happen.

And so I'm not sure if it's the if we're speaking of the same vendor, but the one that reached out on LinkedIn, they actually were considered.

So they were okay.

They would fall into one of those charts on page 98.

Perfect.

Thank you, thank you.

But but again, staff will do a better job when we bring items to you to explain how we got to the final result versus just saying this is this is the vendor, and we're asking you to pay for for the software.

Thank you, thank you.

Addressing the next one, the staffing.

Addressing the next one, the staffing Winston, thank you.

So our next item is IDB staffing comparison.

Good morning, Winston Brooks, Director of Economic Development.

It's a pleasure to be here this morning.

Back in November, this board had asked for some uh information about how other markets in Tennessee administer their IDB, and so that's what this report is uh today is uh in response to to that request.

Um so it's been uh quite an interesting project for me to work on.

I really enjoyed speaking to you guys second advanced this one.

Um enjoyed speaking to my colleagues across the state, um hopefully uh internally here, then we we talked with Nashville, Memphis, uh Knoxville, and then uh it was recommended also talk to Clarksville Montgomery Economic Development Council.

So it's been um very educational for me.

I think you'll uh appreciate the information that I have to share with you today.

So um also um talked to to the some some attorneys obviously uh involved and so in um Metro Nashville, uh Memphis Shelby County, uh the city of Knoxville, which uh is um operated by the uh Knoxwell Community Development Corporation, and then in Clarkswell, it's the Clarkswell Montgomery Economic Development Council.

And I concluded with a follow-up conversation with Mark Mementoff and our internal staff.

And um, as you're aware, probably the Mark Mamatoff works with most of the IDBs across the state, so his uh information was very valuable.

Um each IDB is authorized under state statute 753101, the IDB uh law, and for the most part use the same tools, bonds, pilots, and TIFS.

Um I found they the two primary administrative models are direct administration of city staff or a third party uh organization.

So um starting with Chattanooga, as you know, um Chattanooga has nine board members, and we appreciate y'all's service, and and one staff uh Maria out of the the legal team.

And I just want to who does that in her spare time.

And I do what a pleasure she is to work with and what a great job she does.

It couldn't be done with without her support and then um shared resources uh through through the city uh economic development, uh Sharita and myself and and the rest of the team and Richard Bielan as well as economic development department.

So um based on the uh comparison of IDBs across Tennessee's largest cities, Chattanooga operates with minimal staffing tied with Nashville for the lowest number of staff among the cities listed.

Chattanooga operates as many IDBs in the state with one or two city staff managing deals and projects and a shared arrangement for financing and legal support.

Chattanooga also supports small business programs such as uh Edge does in Memphis with the city attorney's office providing staff for agendas, communication, and correspondence.

In Nashville, um they operated similar to uh Chattanooga.

Um they have but they have a formal agreement in place.

Now also want to mention that uh Sharita Allen is our senior advisor uh for workforce development, and Jamari Brown is the senior advisor in Nashville.

And so Jamari uh through an intergovernmental agreement is identified as the one employee for the IDB, but then there's that intergovernment agreement that also covers all the other uh the financial department, the legal department, and any other shared resources that might come through the city.

Memphis has created a separate organization that manages uh the city and the county, and uh they have nine dedicated staff uh for economic development, and uh they have the largest operating income of about two million dollars.

And I just want to take a moment just to talk a little bit about revenue.

When I when I talked to uh Nashville uh um senior advisor uh Mr.

Brown, you know, he really encouraged me to try and dig in and find the you know the operator the net operating income, the revenue for these sources, and he said that'll tell you how much staff they've got.

And so I thought, well, that's a great idea.

So I did uh I didn't um I wasn't successful finding all of those revenue sources, but I uh found some.

And uh if you're familiar with ours, Chattanooga's goes up and down based on the number of deals because of the the fees that are paid for different development deals to to the IDB.

Um in Memphis, they um do a lot of deals and their fee structure is higher than ours, and so again, that's why they're also able to afford the staff of of nine there.

Now it's also important to realize they also have the port authority, uh the foreign trade zone, and so they have a total of 18 employees to complete that whole organization there.

Uh Edge also manages small business programs like Chattanooga and Business Attraction.

Uh and then uh, you know, it's interesting to note that um Mr.

Mamentoff um said that this is a really unique model throughout the state in Memphis.

So moving to Knoxville, they uh are operated by the Knoxville Community Development Corporation.

They have uh one staffer, Mr.

Um Bentley, and um he said they basically have one to three, they have one dedicated economic development staff person, but then they have another person that does uh redevelopment that can come in uh and a CEO that will come in and assist if the project needed that extra assistance.

And then um again through this the conversations it was um advised that I go and speak to um Clarksville Montgomery County, which is uh while they're fast growing, they're they're they're actually getting they're catching up with Chattanooga's uh population size.

Um they are um operated uh with three staff members.

They have um a CEO, a workforce development director, and a coordinator.

Um the Clarksville Montgomery County uh economic development council houses this is kind of where it gets a little different.

They house the chamber, the tourism, and economic development.

And while they call it Clark, Clarksville Montgomery, it's really just a county um organization.

Um they do a little, they do help Clarksville out, but it is operated by the county, and the county also provides um $500,000 a year for uh to offset their operations.

So the key takeaways are you know that the way that they're administered, there's basically either with city staff or a third party, um the staffing levels uh vary.

And then um you know the largest uh board is um in which one is it?

Uh Clarksville, Montgomery, they have 13, and Memphis has 11 board members.

And then the service areas, they're either um exclusive to that city that they serve or they are uh a metro or a mix of serving the county and the city.

So with that, I'll I'll take any questions.

Um what about Hamilton County?

We didn't have anything on here, they have their own industrial development board as well.

So um a great point.

Um Phil, Hamilton County.

Um, you know, I did not uh dive directly into um their their board.

Um seems like that would have been a good place to do that.

I'll apologize.

I I'll get that information for you.

Yeah, I think they they do specific bond funds on here, and we we've seen them involved, so I just wondered you know how how would they compare?

I think it's similar to how we're set up currently.

Yes.

Mr.

If if I may, um, as far as these other uh four locations, um, cities, counties, what have you, are any of these staff members paid by the industrial development board or whatever they call it in their respective areas?

Because you can correct me if I'm wrong.

I I mean Jarita does wonderful job uh keeping us informed and with what she does, but we don't pay her as a board.

And same, I think with uh and more than Maria and Phil.

And so my question is we know we as a board have no employees.

Um do any of these other four cities have employees?

Well, I would uh the the Memphis organization that's um run with uh Joanne Massey, they're paid by the Edge organization.

The others are probably pay, you know, the other obviously the only other one that could be questionable would be Clarks Montgomery, and I need to uh confirm whether or not they're being paid by the county or they're being paid by the IDB.

They're probably being paid by the county.

Um that's a good question.

Um one of the reasons I ask because I this I think came to light through uh this past October through a county audit and some findings that they uh had, and I think that's kind of what brought this up a little bit.

And uh I'm I'm still amazed that you and Jarita and your office can keep up with what you do and do all your side stuff that you're supposed to be doing, and yet inform us and keep deal with us as well.

And uh I think from the the audit, one issue that arose was someone being designated to oversee these things and keep focus and make sure that we're getting the reports back that we're supposed to be getting from these um folks that get the TIFS or whatever, and um that that would be a whole lot easier if we had someone I think that was paid by the industrial development board to say this is your job.

Yes.

And I think we've got funding we might could pull it off.

Um so there's an interesting discussion we had with or I had with with Mark was you know, how do you structure those that fee schedule?

Because um you can increase your fees, and if you do that, you may um uh reduce the amount of uh developers that want to do deal because of the fee structure, right?

So that would be something you would have to negotiate through.

Um because they are uh except for Clarksville, the the edge, their fee structure was such that they are producing enough revenue to provide that to pay for the pay their staff.

Uh the others, like I said, it's usually typically a shared resource model.

And um so uh like in Clarksville, the county was was providing those resources to pay the staff, but it was probably paid by the county and not the IDB, but I'll go back and find out exactly who's uh where those checks are coming from.

One thing I would suggest, I mean I'm I don't disagree.

I I'm not opposed to the board paying an employee, but I would suggest that we would lease employees from the city so that we don't have to set up payroll operations and payroll tax reporting and all that sort of thing.

That and that's the um the issue too that thought in in my discussions with Mark too is if you do set it up um if you become into an independent organization, then you do have to uh allow for all the other uh resources that you might be able to uh leverage using the city finance department, legal teams, and economic development staff.

So that that's that's kind of the decision that has to be made is do you really want to stand up all those organizations or or how do you arrange it?

You know, so that that's that and quite frankly, we can go and continue to dig dig into this and do you know uh you know more assessments and talk to all the stakeholders who are involved and see what might make sense.

I wish you would.

I don't know, I'm just one of nine, but I wish you would if you don't mind.

I think that would be helpful to us and long term would would just be a good thing.

Yeah, I mean I think this is a good first start in um providing an overview of our peers and across the state, but I do think just some more discussion around this um would be helpful and some more insight as you all are researching more, doing some more discovery um will be helpful.

Of course.

My pleasure thank you for what you've done so far.

Oh, sure.

Any other questions?

All right, excellent.

Thank you all, follow us.

Any other new business?

Madam Chair Woman.

Did want to point out our we've got a board member with a birthday today.

So thank you.

Yes, this is the best way to spend my time today.

Yes, thank you.

Any other discussion items?

We stand adjourned.

Thank you.