Kerrville Area Chamber leaders gathered a skilled group of experts to speak to attendees at the Kerrville Chamber of Commerce Economic Summit April 22.
The keynote speaker was Dr. Ray Perryman, renowned economic researcher and analyst.
Local speakers included Mark McDaniel, City of Kerrville city manager; Cory Edmondson, Peterson Health president/CEO; Kristin Hedger, Killdeer Mountain Manufacturing vice president of business development; and Gilberto Salinas, Kerr Economic Development Corporation executive director.
This event was planned to bring Kerrville and surrounding communities together to receive a current economic update, and a “State of the Union” on happenings within this region.
Brad Barnett, Kerrville Area Chamber of Commerce, officially welcomed the crowd that filled tables in half of the Happy State Bank Event Hall at the Hill Country Youth Event Center.
City of Kerrville
McDaniel shared what he called “exciting news about what is going on here with our resilient economy.”
He acknowledged his “very supportive city council” and “incredible staff and leadership team.”
McDaniel started with an introductory slide about the “Kerrville 2050 Vision,” saying it drives city strategies, budget decisions and priorities. He particularly emphasized the first two bullet points about being a “vibrant, welcoming and inclusive community” and respecting the natural environment here while at the same time seeking to attract economic growth and development.
He called their goal “balanced and measured growth” that takes into account Kerrville’s natural beauty and small-town charm and culture.
McDaniel reminded attendees “Kerrville 2050” is the community’s plan; and the community shaped everything in it, from the vision statement to 400-plus action items. And it will be five years old June 2023, triggering a more in-depth review.
Under complete action items, he listed a long-range water supply plan; a workforce housing study and strategic plan; the Doyle Community Center Area Development Plan; a Drainage Master Plan; and a Street Paving Plan.
Under way or pending are new water/wastewater infrastructure plans; and the next area development plan.
“We cannot grow and prosper without infrastructure. I want to emphasize how critical it is for balanced growth,” he said. He talked about two critical projects being funded through low-interest state financing – the Legion sewer lift station which doubled capacity of the old station, and the Knapp lift station and trunk system to benefit western Kerrville. Completion on the second project is expected by late 2022 or soon thereafter.
He said the long-range water plan is a 100-year plan with strong focus on strategies through 2050. His chart illustrated “existing firm groundwater,” “existing firm surface water,” and the existing firm non-potable reuse supply.
Under streets, pedestrian amenities and drainage, McDaniel listed $10 million in major street and drainage improvements, Olympic Drive extension, River Trail extension, and some pending projects. He said the EIC is studying feasibility for a trail extension from G Street to downtown on the north side of the river. And the library downtown is funding a new permanent ramp system down to the River Trail (after a storm destroyed the old wooden stairs).
McDaniel spotlighted the need for a new public safety building to house the Police Department, Municipal Court and Fire Administration.
He also addressed workforce housing as both an impediment and opportunity. Residential sales have grown through February, he said, and “it appears the only thing that will slow this down anytime soon is simply a lack of inventory.”
McDaniel said from FY19 to FY20, the average price of a home increased 13 percent. Then since last October, it grew another almost 14 percent. We mimic the nation in this, he said and the shortage is especially acute for entry-level homes.
McDaniel said the main answer in Kerrville is to work their Strategic Housing Plan; and listed partnerships for The Landing, Sendero Ridge and housing on Holdsworth Drive. He also discussed “infill housing” in established parts of town by multiple builders. And he talked about the city’s partnership with Lennar Homes for workforce housing on Loop 534, 135 units on 34 acres and titled Ridgeland. Another discussed was Comanche Trace.
McDaniel discussed regional retail growth, with Kerrville as a regional hub representing more than 100,000 people. This figure is based on cell phone and credit card data.
He addressed sales tax performance, saying the city has performed higher month over month through the pandemic. He said only April tax collections were flat, representing February sales when many retailers closed in the winter storm.
McDaniel stressed the importance of tourism, benefitting from RV, cabin and Air BnBs as a “drive-to market.” He listed popular outdoor attractions including the Kerrville Sports Complex; and growing downtown attractions.
He congratulated Charlie McIlvain on his retirement from the Convention Visitors Bureau; and complimented the work by Julie Davis as McIlvain’s successor.
Davis cited as a new strategy, new 360-virtual tours live on the CVB website and other platforms, for use by meeting planners. She said they are updating the Visitor’s Guide; and many meeting planners are making their whole decision based on what they see online, without coming to visit in person.
McDaniel returned to the podium to discuss development and building code updates; and said their financial strategies allowed them to avoid layoffs during COVID. “Through COVID and the winter storm, we’ve been blessed. We relied on each other.”
McDaniel showed brief video comments from U.S. Congressman Chip Roy, and State Representative Andrew Murr.
The CEO of Peterson Health said Kerrville has exceeded his expectations in his two years here.
Edmondson announced April 29 Town Hall meetings at 2:30-4:30 and 5:30-7:30 p.m. for a Chamber strategic plan.
As a medical CEO, he addressed the idea of a “single-payer system” on the horizon, saying it has pros and cons and sounds appealing. But others have tried this and it’s costly. They canceled it.
He also talked about reimbursements in health care services; saying healthcare facilities don’t get the full amount of the cost of health care for many treatments. He called it a “broken system.”
On COVID vaccines, Edmondson said there are 15 variants around the world now; and two or three they are watching in Texas.
The local hospital was hit hard, he said, showing a list by the month of positive cases. But the chart of seven-day average of cases is decreasing here.
He said about 26 percent of U.S. residents have received shots, compared to 22 percent across Texas, and 24 percent in Kerr County.
“This was a collaborative effort including our ISDs, and you should be proud,” he said.
He said hospital expenses were increased for COVID supplies, especially for N95 masks.
“We took a $5.9 million hit from COVID.”
At the state level, he said the question is, will the Legislature expand Medicaid?
He said state reimbursements are past due now; and supposed to be 90-10 match payments.
Edmondson also said telemedicine is here to stay; and doctors have adapted well. But 300,000 households don’t have broadband access; and 90 percent of that is in rural communities, Kerr County included.
He said as a local not-for-profit health system, they are ranked in the top 10 percent of Texas facilities. And obesity and physical inactivity are still top health dangers. “Community Health Assessments are done here every three years,” he said.
He listed their awards; and their charity care and “bad debt,” saying some people can’t afford care and others just don’t pay. He said their local access expectations and needs are affected by a growing lack of physicians.
“But we are the largest employer in Kerr County, and paid out $92 million to employees in 2020.”
Asked by an audience member if Kerr/Peterson Health needs a “public health authority,” he said it makes good sense to do that. He also was asked about a Neo-natal unit here.
He explained while COVID vaccines are free, the hospital charges a fee to administer the shots, and bills insurance or the patient. He got no good answers from the state about not receiving the levels expected or needed for Kerr County, despite calls to all state offices including the governor’s. PRMC isn’t closing vaccination clinics, but there is less demand now, too. The next one may be April 30.
Hedger, a senior vice president of Killdeer Mountain Manufacturing, said she was a student in Kerrville at Doyle, Starkey and Nimitz, and graduated from Tivy. She spent summers with her grandparents in North Dakota. She has an electrical engineering background, to support her involvement in the KMM’s business of being a “wire harness shop” supplying Lockheed-Martin, NASA, and others. “Our customers are half defense and half commercial, and we have a foothold in unmanned systems now.”
She defined “wire harness” as the communication and nervous system of airplanes.
“I always wanted a connection between North Dakota and the Hill Country. And we looked at expansion first in North Dakota, but saw a continued lack of workforce,” she said. “‘Heartland manufacturing’ was the goal and the Hill Country is a good fit.”
She cited great customer support and Texas’ warm welcome, and said KMM and Kerrville have an opportunity for high-level science.
Asked about their local site, she said, the location is between the two Fox Tank sites, and they are aiming for construction completion by end of 2021. Hiring will be a phased approach, about 20 people at first who will get on-the-job training (no college degrees required), and they build staff from there. Assembly workers could expect pay $14,500-22,000; and five years out they foresee about 200, rising to 400-500.
“We have a tremendous interest from customers, even on a national level; and now a connection to Boeing as a customer,” she said.
Salinas, KEDC director said his organization is on the brink of a game-changing project; and “I never use that term lightly.” He said they are “orchestrating three projects” now, including getting KMM to “pop-up” status. “And then there was that ‘little virus,’ but talk about Kerrville persevered.”
He discussed briefly restaurants’ performance and sales tax revenue during COVID.
“It’s a little bit of luck, coincidence and Kerrville’s position as an area hub,” he said; then turned his part of the program over to his staff, Theresa Metcalf and Claudia Richards.
Richards said KEDC is offering a new entrepreneur center called an Accelerator Program, offering advice and answers for how to get started, then continue and develop. This is for start-ups and existing businesses; and costs a single fee for all sessions per client.
Dr. Ray Perryman
Perryman said he’s on the road 150-200 days most years, and then he was home last year.
“Have a little bit of sense about last year; it was very atypical for businesses. Economic recession usually happens because we’ve done something stupid.”
He said COVID was an outside ultimate source of upheaval; and it happened in the 11th year of economic growth.
“There was not anything wrong with the economy, to fix this. We just had to hold it together and get the health crisis under control,” he said.
And this time people couldn’t look through the lens of past history; that the Spanish Flu epidemic in 1918 wasn’t the same.
“And it’s hard to get your arms around how fast this COVID thing happened,” he said.
He compared the 2008 Great Recession and job losses then; and the 2020 COVID job losses and layoffs, especially the oil industry.
Perryman said one response he heard was a “V-shaped recovery,” but his opinion is, “No way!”
For government, he said the choices were between bad choices and terrible ones. He gauged it by his speaker’s schedule, with its frequent postponements.
In 2020, he said America lost GDP but lost worse in employee counts.
He said Texas lost big in two ways – tourism, especially the “Alamo area” that includes the Hill Country (150,000 jobs); and the oil industry, losing gross output and some jobs.
“But Texas came back faster than two-thirds of the other states. And Texas is projected to grow faster than the rest of the U.S., and the Hill Country second best of all areas across the state.”
He called government aid “not perfectly sized packages.”
“We were getting better, and then February happened. There are a few things we will never get back. We’ve had $200 billion in damages over several years.”
Under “permanent changes,” Perryman listed economic development, with more companies participating and less reliance on foreign countries; plus a diversifying supply chain. “Competition is stiffer than ever.”
Other factors are healthcare; broadband service; school systems; and community amenities.
“If you had to shelter in place for a year, make it a place you wouldn’t mind being there.”
He said Kerr County is well-positioned. Retail will change as on-line shopping accelerates, but it won’t be a full substitute for shopping in stores.
Travel adapted starting with “Sept. 11;” and business travel will resume for the synergy of people working face to face. People are working from home a lot, but in practice no business is willing not to have a central office space, he said. But the amount of space is changing.
What’s not changing as much is the energy industry. He said oil and gas still provides 85 percent, and 96 percent with coal added in. Wind and solar provide 4 percent.
“We will need twice as much energy in the next 30 years. Coupled with February’s freeze, even the folks in Austin see it now - we need back-up power.”