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Mayor proposes radical change to EDC

July 23, 2012

In a surprise move pushed forward by Mayor Tommy Duncan, the Big Spring City Council is set to consider a radical reorganization and repurposing of the Big Spring Economic Development Corporation that could see the dismissal of the agency's board of directors.

The council is set to consider first reading of an ordinance calling for a special election to be held during the Nov. 6 general election for Big Spring voters to consider abolishing the current one-half cent sales tax currently devoted to Type A economic development and replace the tax at the same amount with a Type B Tax under Chapter 505 of the Texas Local Government Code.

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 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. In this situation, a Type A EDC must publish notice of its intent to fund a Type B project, hold at least one public hearing and conduct a special election.

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.
To promote and develop new and expanded business enterprises that create or retain primary jobs, a Type B EDC may fund public safety facilities, recycling facilities, streets, roads, drainage and related improvements, demolition of existing structures, general municipally owned improvements and maintenance and operating costs associated with projects.

Type B EDCs also may seek voter approval to spend Type B sales tax funds for a water supply, water conservation program or to clean up contaminated property.

Also on Tuesday's meeting agenda, the council is set to discuss and consider taking action on removing and replacing board members currently seated on the Big Spring EDC. The board is currently comprised of President Justin Myers, Vice President Dr. Keith Ledford, Secretary/Treasurer Rodney Bomar, Scott MacKenzie and Jim DePauw.
This move comes on the heels of a voter approved Type B project approved in May 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 agreement between the council and the EDC board was reached after several weeks of hot debate in which numerous local officials and residents opposed the use of EDC funds for the project, claiming cutting the agency's budget nearly in half for the next two decades will cripple economic growth in the Crossroads area.

In hopes of quelling the fear the municipality would use the EDC as a cash cow for future Type B projects, the council also added a provision to their May agreement to prevent what many residents considered a fleecing of the corporation.

“We also added a provision to belay any concerns the city council was going to keep coming back to the well and pushing the EDC in this direction,” City Attorney Linda Sjogren said after the agreement was reached between the city and the EDC. “In the future, if the city council proposes a Type B project and it is approved by the voters, the amount of the (new) project would reduce this project. This was just to show the spirit of the agreement.”

At this time it's unclear how the provision or it's intent to show the council's “spirit of the agreement” will come into play during Duncan's push to reorganize the EDC.

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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