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EDC opens $500K coffers at last

By Judith Pannebaker BCC Editor

Acting President Joe Hearn convened a meeting of the City of Bandera Economic Development Corporation on Wednesday, Sept. 19 - the first one since the spring.

During the session, EDC directors funded Christmas lights at City Park as requested by Genie Strickland on behalf of the Bandera Business Association. Strickland received $3,500 toward the holiday effort - $1,500 more than requested, courtesy of Director Binky Archer. As Archer pointed out, the donation hardly made a dent in the $535,565 that had accumulated in EDC coffers. The half a million dollars includes funds in a checking account and a CD at Bandera Bank.

Each month, the city sends the EDC a portion of the sales taxes collected within the municipality.

City council must formally approve the $3,500 donation. According to City Administrator Mike Cardenas, the donation does not have to wait 60 days before being dispersed. "Christmas lights qualify as a community support and is considered an administrative expenditure rather than a line item," he explained.

Aside from that bit of business, however, little else was accomplished. The last regular meeting of EDC was held on May 12.

Point of meeting?

The main thrusts of last week's get-together seemed to be acknowledging that EDC financial records were in disarray, the need for a financial audit and the reluctance of members who have overstayed their term limits to be replaced before December.

The only interesting agenda item, "Possible retention of legal services," was "passed" rather than being discussed.

That agenda item seemingly stemmed from a Tuesday, Sept. 11, meeting of city council, when names of possible new EDC members - Carolyn B. Edwards, Johnny Boyle and Don Giles - were placed on the agenda. At that time, Hearn indicated he would "legally challenge" the opinions of municipal attorneys, Monte Akers and Barbara Boulware-Wells.

Earlier, the attorneys had advised city officials that four corporation members have, in fact, served far beyond the legal term limits as defined as six years in state statutes. Hearn told council he would consult with the Texas Municipal League as well as with the Office of the Texas Attorney General regarding the attorneys' opinions.

"Newspaper said ...'

Interestingly, during the Sept. 18 meeting, EDC Director Vonia Dyer noted, "The newspaper said we were terminated." Frequently, EDC members have blamed "the newspaper" for pointing out irregularities, such as holding a meeting without a quorum, as well as directors overstaying their welcome. Admittedly, "the newspaper" may report transgressions, but it is state statutes that make them illegal.

In fact, Title 12, Planning and Development of the Local Government Code, Chapter 501 "Provisions Governing Development Corporations" succinctly limits the terms of service of EDC directors.

Sec. 501.062. BOARD OF DIRECTORS notes:
(a) All of the powers of a corporation are vested in a board of directors consisting of three or more directors appointed by the governing body of the corporation's authorizing unit.
(b) A director serves for a term of not more than six years.
(c) The governing body of the corporation's authorizing unit may remove a director for cause or at will.
(d) A director serves without compensation, but is entitled to reimbursement for actual expenses incurred in the performance of the director's duties under this subtitle.
Added by Acts 2007, 80th Leg., R.S., Ch. 885, Sec. 3.01, eff. April 1, 2009.

Longtime directors include Hearn, who has served 13 years; Don Clark, 15 years, Dyer, 11 years; and Linda James, eight years.

Not our fault

In an interview, however, former President Horst Pallaske, who served on the EDC board for 15 years prior to resigning in May, defended his former EDC colleagues.

"Every time an EDC term expired, we brought it before city council and they reappointed the director. It is not up to EDC to take themselves off the board, that is the job of city council," Pallaske said. This took place as he also served as mayor. Acknowledging city council's contribution to the current contretemps, Mayor Pro Tem Maggie Schumacher said, "Yes, Horst is correct. We apparently weren't aware of the rules either. However, now we do and we're working to correct the situation as soon as possible."

When queried about Hearn's threatening a "legal challenge," however, Pallaske parted ways with his former colleague. "That's not right. The council has the authority to replace any EDC director at any time. That should be dropped."

Pesky state statutes

Because the EDC directors appeared reluctant to update their corporation's bylaws as required by state statutes, Bandera City Council, under the direction of municipal attorneys Akers and Boulware-Wells, completed the task in August.

Under Sec. 501.064 of BYLAWS, EDCs are required to keep their own houses in order and operate according to state laws rather than those of "commonsense." Specifically:
(a) A corporation may adopt and amend bylaws for the administration and regulation of the corporation's affairs.
(b) The board of directors shall adopt a corporation's initial bylaws.
(c) The bylaws and each amendment of the bylaws must:
(1) be consistent with state law and with the certificate of formation of the corporation; and
(2) be approved by resolution of the governing body of the corporation's authorizing unit.

Added by Acts 2007, 80th Leg., R.S., Ch. 885, Sec. 3.01, eff. April 1, 2009.

And even more

The same Local Government Code also spells out the length of time a director may serve as a corporation officer. As Sec. 501.065. OFFICERS states:
(b) An officer of the corporation is elected or appointed at the time, in the manner, and for the term prescribed by the certificate of formation or bylaws, except that an officer's term may not exceed three years. In the absence of provisions in the certificate of formation or the bylaws prescribing the selection or terms of officers, the board of directors shall annually elect or appoint officers.

For the record, the "governing body of the corporation" is Bandera City Council, which, as Pallaske pointed out, has authority to replace EDC directors at will.

'Questions & accusations'

Although a joint EDC-city council meeting on March 14 engendered much discussion, little of substantive nature emerged. City Secretary Linda Boshek noted that council had expressed concern that the EDC bylaws had not been updated.

Referencing the joint meeting and its outcome - updated bylaws - Hearn opined, "There's been a lot of questions and accusations being made.

This hasn't been handled right."

A concerned citizen said, "The mayor pro tem said (members of EDC) had been terminated."

"At the joint meeting, there was no discussion of termination," Hearn said. "The bylaws set term limits, but no action was taken by the city."

Concurring, Archer said, "No motion was made."

Clark felt that the proper way to handle the situation would be to allow the present directors to remain on the EDC board until December. At that time, council could appoint new directors.

"Terms expire in December. Unless council terminates us, we're still here," Hearn said.

Handicap ramp?

Clark added, "This needs to be settled. If council doesn't terminate us, we have to get on with the projects."

Apparently, one incomplete project is a handicap ramp. However, the last EDC meeting was held in May, allowing little opportunity for discussion of cost or soliciting bids for the work. "We just need to know something," Clark said.

According to Cardenas, however, currently no engineering plans exist that involve the installation in the city of ramps for handicapped individuals. The Americans with Disabilities Acts offers specific guidelines that must be followed and no plans have yet been submitted to his office, Cardenas said.

Additionally, the city has solicited volunteers for all commissions and corporations. A special meeting on Tuesday, Sept. 25, included discussions of replacement of EDC members whose terms have expired.

As Margo Channing said in the film, "All About Eve," "Fasten your seatbelts, it's going to be a bumpy night." Stay tuned.