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2012-08-23

Over EDC objections, new bylaws approved

By Judith Pannebaker BCC Editor

During a special meeting on Wednesday, August 15, Bandera City Council discussed proposed changes to the bylaws of the city's Economic Development Corporation. The bylaws hadn't been updated since the corporation's creation in 1997. Additionally, none of the members seemed to have copies of or even recalled working under bylaws.

'Basic commonsense'

In fact, during an earlier EDC meeting, members seemed nonplussed to find they were expected to adhere to any rules and regulations, preferring instead to work by the rules of "basic commonsense," according to Director Joe Hearn
In the past, directors' "commonsense" rules have included holding a public hearing without a quorum of members and illegally electing an officer in violation of state statutes. State statutes say that an officer's term may not exceed three years. Former Mayor Horst Pallaske, who also served as EDC president, began his term in 2007 and was re-elected in January of this year.

In addition, no members of the EDC had been bonded as required by law.

Regarding the EDC's "commonsense" rules, one witty city watcher quipped, "Their ideas were far too common and made not enough sense."

As a result of the EDC's former legal missteps, during a meeting on March 15, city council asked municipal attorney Barbara Boulware-Wells to work with a committee to develop an updated version of the corporation's bylaws.

The committee was comprised of EDC members Binky Archer, who also serves on city council, and Linda James, as well as Boulware-Wells, former city treasurer Ernie DeWinne and Mayor Pro Tem Maggie Schumacher, who explained, "We wanted to bring the local EDC bylaws in line with the state statutes governing the corporation."

Hearn takes umbrage

The changes brought before council last Wednesday were approved during a regular meeting on Thursday, August 16.

Explaining the EDC's seeming lack of interest in the project, Hearn said, "(The EDC) did not call for the document, city council did." He noted that city council asked for the update five months ago and asked, "How many times did you meet?"

"We met four or five times and then gave our recommendations to counsel to ensure the changes were in compliance with state statutes," Schumacher said. "The EDC did not choose to review the changes. You haven't called a meeting since April."

Hearn then took exception to using EDC funds to pay attorneys' fees for updating the bylaws. "We didn't approve this expenditure," he said.

When apprised of Hearn's statement, Boulware-Wells told council that time spent upgrading the EDC bylaws were paid out of the economic development corporation's line item in the budget for legal fees.

"The bylaws needed updating and the EDC board will now be getting the benefit of being aligned with state statute," Schumacher said.

Participation & compensation

Major changes include allowing two of seven EDC members to reside outside the city. However, provisos include that the two non-city residents must have a "vested interest" in the municipality, such as owning a business, or must have demonstrated expertise in economic development.

Previously, all seven members had to have been city residents.

Additionally, of the five members from the city, four cannot be employed by the city or serve on city council. When James noted, "There's not much the EDC can do without council's blessing,"
Schumacher replied, "In reality, even with the high number of city council members serving on the EDC, we did not know what the EDC was doing.

Reports were not given on a regular basis."

"There cannot be a quorum of city council serving on EDC," noted Archer.

Additionally, city employees who also work for the EDC must receive compensation from the corporation.

Previously, city secretary Linda Boshek was given comp time after providing administrative support for the EDC, which left city offices shorthanded on a regular basis. However, city work crews assisting with EDC projects while off-duty were routinely paid for their time.

When Schumacher noted that EDC projects should support the city's long-range master plan, James astounded everyone by asking, "We will be given copies of the master plan?"

"The EDC has been given copies of the master plan and it's also available on the web," Schumacher said. The master plan will also be included in binders given to all EDC directors.

EDC meetings have been increased from quarterly to at least 12 times a year or as often as needed - and must demonstrate a quorum to proceed.

Conflicts of interest & nepotism

Other state-imposed mandates on economic development corporations include mandatory disclosure of conflicts of interest, such as businesses or real property, that involve EDC projects. This will require the director in question to sign a sworn affidavit and recuse himself from voting on projects in which he has a personal interest. Also, apparently the state now frowns on directors funneling EDC projects to relatives.

Regarding terms of office, Councilman John Hegemier seemed reluctant to impose term limits on EDC directors. This, he felt, "... would result in the city running out of people."

Stating the obvious, Hearn said, "We don't have a city with 100,000 residents."

It was suggested that after a director had reached his term limit, that director could sit out a year or two then recycle back on the board. "We don't want to stop someone who is good from serving," was the general consensus.

"Our proposal of a six-year term limit corresponds with that of the state, which is "six consecutive years," Schumacher said. "We want to get new ideas. We want to keep the board from becoming stagnant."

"We have good ideas," Hearn rejoined.


Potential fiefdoms

When polled in March, EDC directors were unaccountably fuzzy about how long they had actually served on the board. Pallaske reckoned he had served from 10 to 14 years; Clark, 10 years; Hearn, since 1999; Archer and Charlie Fellows, about a year; James, two to three years; and Vonia Dyer, "five, I think."

In reality, Clark has served 14 years; prior to his resignation in May, Pallaske also served for 14 years; Hearn, 13 years; Dyer, 11 years; James, eight years; and Archer and Charlie Fellows, two years each in November.

On August 16, Hegemier continued to lobby for a no term limit for EDC directors, which would allow them to serve indefinitely - or even longer.

When someone suggested that an exception be made for a director working on a "special project," Councilman Nancy Montgomery observed, "I'm sure the president of the United States has 'special projects' going, but when he's out, he's out."

Hegemier's motion for no term limits died for lack of a second, ensuring that term limits will be imposed.

After doing his obligatory thing, Hegemier joined a unanimous vote that approved all changes to EDC bylaws.

To date, the EDC has received $202,950 this year - which amounts to 33 percent of all sales tax collected in the City of Bandera.