The decision presented Monday night to Big Spring Economic Development Corporation board members was a hard one, according to Justin Myers, president of the BSEDC board, but it was one that had to be made.
“Hopefully this will be a one-time deal and our funding will be back up and we can continue to do economic development in 20 years after this agreement,” Myers said.
During a special meeting Monday night, the BSEDC board voted to approve an agreement which would provide 40 percent of the sales tax funds it receives during the next 20 years or a total of $13 million in order to help the city of Big Spring fund the repair and rehabilitation of the city's water and waste water treatment plants and the repair and replacement of city water distribution lines.
“We wanted the spirit of the agreement to be in there and we are not completely in favor of this deal. This will effect the EDC, there is no doubt about it. We are talking about taking $13 million out of economic development over the next 20 years, but I think we are prepared … when you really sit back and look, the people wanted a combined effort on this deal,” Myers said.
Since the board approved the agreement terms, the agreement will be presented to the city council during tonight’s meeting for approval as part of the 4B project which will go to the voters in the upcoming election.
The board was presented with three term agreements to vote on: 1. 40 percent of all income — all income being defined as principal payments, interest, rental and sales tax — with a floor of $500,000 and a ceiling of $700,000; 2. 40 percent of sales tax with a floor of $500,000 and a ceiling of $750,000; 3. 40 percent of all income — all income defined as interest payments, rental and sales tax — with a floor of $450,000 and a ceiling of $750,000.
“When you look at the numbers it's a little less than we do on average but it’s something we can live within. We will definitely have to do things different and we will have to keep things a little tighter, but that’s OK, we will just have to be a little more cautious,” Myers said.
As part of the agreement, the EDC will make the first two payments — with the first payment being made January 2013 — in 2013 and 2014, which would be in the total of $750,000 each and then the floors and ceilings would kick in, in regards to the 40 percent of income received through sales tax.
“The reasoning for that is the city has a bond that matures in two years and this will help them until they have some additional revenue to be used toward projects. We felt it was a good offer to make,” Terry Wegman, executive director of the BSEDC, said.
After reviewing numbers and financials from the past 13 years with figures of projections regarding the time of the agreement, the board unanimously voted to accept entering into an agreement based on the terms of option 2 and made a motion that stated the funds being designated were required or suitable to the project at hand.
Public input was also allowed after the board made its final vote. Several members of the city staff were in attendance and expressed their gratitude and appreciation for the approval by the board.
“I don’t know that you have to like it, love or agree with it, but can we still survive and do some semblance of economic development … I think we can. You take 13 million out; I don’t know there is anyone that will say it won’t affect us because it will,” Myers said.
“We will have to do some things differently. We just won’t have the cash to do it anymore, but there are tools we can use, for example, tax abatements,” Myers said. “It’s going to be hard but I think we can get it done. We will just have to use every tool in our tool belt.”