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2012-10-25

Mostly new EDC approves 'first step' to new hotel

By Judith Pannebaker BCC Editor

Newly sworn in directors of the reconstituted City of Bandera Economic Development Corporation held their inaugural meeting on Wednesday, Oct. 17.
After calling the meeting to order, municipal attorney Monte Akers presided over the election of new officers - President Johnny Boyle, Vice President Binky Archer and Secretary Carolyn B. Edwards. Other EDC directors include Thomas "Charlie" Fellows and Esther Maldonado.
After turning the meeting over to Boyle, Akers offered an overview of the EDC, clarifying its scope and nonprofit status. According to Akers, while the EDC is a nonprofit organization it is not a 501(c)(3), as previously touted.
EDCs are created under specific state statutes, now located at Chapters 501, 502 and 504 of the Local Government Code. "Since all EDCs are codified in the EDC act to be nonprofits, it was not necessary to incorporate under the nonprofit act," he explained. "Some EDCs also become 501(c)(3) agencies for federal grant purposes. Although the Bandera EDC is not a 501(c)(3), that does not mean it is acting improperly."
EDCs routinely operate as nonprofit entities with their own corporation bylaws and meetings and business conducted in "a fairly independent manner," Akers noted. "Nevertheless, all EDC programs and projects must be approved by city council and city council also has authority to appoint and terminate members for whatever reason - or for no reason at all," he explained. "EDCs make independent decisions but with council approval."
In 2003, the Texas Legislature reigned in the authorities of EDC boards after discovering funds has been spent incorrectly. In 2005, however, legislators reinstated most of their perogatives.
According to Akers, the scope of EDC projects can extend to offering tax abatements, cash grants or loans to businesses bringing jobs - and increased tax revenues - into the city. EDC funds would be protected by a performance agreement and after securing council approval, of course.
He also noted that mandated approval must consist of a resolution read twice in council about any proposed EDC program or project. "It's a cumbersome process, but is necessary because some EDCs were acting too independently," Akers said.
EDC programs, he said, were not so clearly defined in state statutes. "EDCs are allowed to spend 10 percent of their annual sales tax collected for 'administrative' promotional programs."
Noting various requests from local nonprofits for advertising dollars, Boyle asked, "Is advertising a part of the 10 percent? This is a big item in Bandera. How much can we spend?"
"The mayor (pro tem) would like to hold a workshop to provide further training for EDC members," Akers said.
Agreeing, "We need a better feel for the proper way to run this thing," Boyle said a workshop would provide education about EDC revenue streams and budgetary matters.
Regarding the budget, the EDC has current assets totaling $683.895. When Boyle asked about an audit, Akers told him Bandera includes an EDC audit as part of a mandatory annual audit of city finances. There would be no need for an independent separate EDC audit, Akers said.
After learning about the corporation's solvency, EDC directors approved their first piece of true economic development. They voted unanimously to partially fund a feasibility study to assess the need for a new hotel in Bandera. Developer Gene Hartman requested the study, which would be completed by Sources Strategy, Inc. in approximately three weeks. Estimated cost would be $4,500 to $5,000. EDC directors unanimously approved funding half the cost of the study with the remainder to be paid by the developer.
"(Hartman's) anxious to get the numbers back," Boyle said. "The feasibility study is the first step." Among other things, the study would determine infrastructure needs, traffic flow and current accommodations.
"They're shooting in the dark until the feasibility study is completed," Boyle said. He added that should a new hotel at the former site of the Old Texas Square complex on Main Street not prove viable, the city would own the study and would use the data for other projects.
"Funding this study is a good faith effort on the part of the city," said Mayor Pro Tem Maggie Schumacher. "This will assure (the developers) that we are interested in them coming to Bandera." Archer indicated the new hotel would create from 25 to 50 new jobs.
"At this point, they're looking for a helping hand," Boyle said. "Lodging with a western storefront look would be a great addition to the city."
Future monthly meetings of the EDC will be held at 6 pm on the second Wednesday of each month with special meetings scheduled as needed. The next regular meeting will take place on Nov. 13. However, a workshop covering methods of operations and the budget will be scheduled before then, pending available dates from a Texas Municipal League representative.
For a related article, see "Lone councilman", below.