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Council to consider special election

August 13, 2012

The Big Spring City Council is set Tuesday evening to consider final approval of an ordinance calling for a special election in November to consider nixing the existing Type A economic development sales tax and to replace it with a Type B corporation.

The council approved first reading of the ordinance during its July 24 meeting on a unanimous vote — with District 1 Councilman Marcus Fernandez and District 5 Councilman Craig Olson absent due to health issues — despite a strong public outcry from local officials and citizens to allow the existing EDC to continue operating as a Type A corporation.

The sales tax was adopted by Big Spring voters May 5, 1990, and designated solely for use on Type A projects, which include:

• Manufacturing and industrial facilities, recycling facilities, distribution centers, and small warehouse facilities.
• Research and development facilities, regional or national corporate headquarters facilities, primary job training facilities operated by higher education institutions, job training classes, telephone call centers and career centers not located within a junior college taxing district.
• Certain infrastructure improvements that promote or develop new or expanded business enterprises.
• Aviation facilities.
• Commuter rail, light rail or commuter bus operations.
• Port-related facilities, railports, rail switching facilities, marine ports and inland ports.
• Maintenance and operating costs associated with projects.

According to the comptroller's office, the Type B sales tax may be used for any project eligible under Type A rules and several other project types, including quality of life improvements. Type B corporations may pay for land, buildings, equipment, facilities, targeted infrastructure and improvements for:

• Professional and amateur sports and athletic facilities, tourism and entertainment facilities, convention facilities and public parks.
• Related store, restaurant, concession, parking and transportation facilities.
• Related street, water and sewer facilities and affordable housing.

According to Texas Comptroller Susan Combs, with voter approval, Type A EDCs may fund projects eligible under Type B without voting to abolish the Type A tax and impose the Type B tax. The city recently went through this process when it held a special election to fund a multi-million overhaul of the municipality's water and wastewater facilities.

As part of the agreement between the council and the Big Spring Economic Development board of directors, the EDC will provide $750,000 a year for the first two years, and then 40 percent of its sales tax revenue — with a floor of $500,000 and a ceiling of $750,000 for the following 18 years — with the city of Big Spring picking up the remainder of the tab.

The overhaul — which was ultimately approved by the voters in the form of a Type B (or 4B) funded project — was agreed upon by both the city and EDC to the tune of 40 percent of the corporation's annual budget, but not before the city included a provision guaranteeing it would not seek further 4B funding from the EDC while the 20 year note was in effect, offering protection to the remaining 60 percent of the agency's budget.

Members of the Big Spring EDC Board of Directors say the move to a Type B EDC corporation — which is being championed by Mayor Tommy Duncan — will allow the council unlimited access to the agency's remaining budget and goes directly against the spirit of the agreement reached as a result of the water and wastewater project earlier this year.

“I had several people tell me then, once we started down this road they (the city council) would get it all, and that's the feel this has for us,” Big Spring EDC Board of Directors President Justin Myers said. “And that's where we feel like we are. We asked to have the 60 percent for 4A, and now you want to make us a 4B. Whether it's the intent or not, from the board's perspective that absolutely broke the spirit of that agreement. Whether this goes to a vote or not, I think from here on out we're going to have a watered down 4A (economic development). I think that's just a travesty for our future.”

Dr. Keith Ledford, who serves as the EDC board's vice president, also didn't take kindly to what he called a “backdoor” attempt to break the agreement between the city and the EDC.

“As far as the agreement is concerned, I definitely feel this is a backdoor way to break the agreement,” Ledford said. “I'm highly offended as a member of the EDC and as a citizen of Big Spring that there has been this attempt to backdoor and not agree, to not stand up for an agreement that you, the city council made with the EDC.”

Also part of July 24 meeting, the agenda called for discussion and consideration of removing and replacing board members currently seated on the Big Spring EDC, a move which also drew the ire of several citizens who spoke during the meeting.

However, Duncan said the item was placed on the agenda prematurely and he would not be asking that any of the existing board members be removed. He did, however, give the remaining council members the chance to make any suggestions regarding dismissals, to which there were none.

Also during Tuesday night's meeting, the council is expected to hold a public hearing regarding its proposed ad valorem tax rate to support its 2012-2013 budget. The proposed tax rate for the coming fiscal year is 89.5 cents per $100 property valuation, a 5-cent decrease from the current fiscal package.

Tuesday's meeting is expected to get under way at 5:30 p.m. in the City Council Chambers, located at 307 E. Fourth Street. Fore more information call 264-2401. Also, a complete copy of the meeting agenda can be found online at www.mybigspring.com

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