Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Economic Development Edc topic
No spam. Unsubscribe anytime.
Bandera EDC reviews legal powers, performance agreements and unused property holdings
Summary
At a City of Bandera Economic Development Corporation workshop, members heard an overview of EDC legal authorities, eligible uses of sales-tax revenue, existing performance agreements (including one with a Best Western) and concerns about undeveloped EDC-owned property and directorsand officers coverage.
At a Bandera Economic Development Corporation workshop that ran about 6:30–7:40 p.m., members and advisors reviewed the EDC's legal authorities, how sales-tax revenue may be used, and existing agreements tied to EDC spending.
The discussion focused on which projects a type B EDC may fund under Texas law, requirements for written performance agreements when EDC funds are granted or loaned, and several governance and liability questions raised by board members, including a longstanding EDC performance agreement with the Best Western and multiple EDC-owned parcels that have not been developed.
Sarah, an attorney advising the EDC, told members that EDCs are governed by Chapter 505 of the Texas Local Government Code and that "EDCs are all subject to the Open Meetings Act and the Open Records Act." She explained that the EDC's funds come from a local sales tax and that type B EDCs — like Bandera's — have broader flexibility than type A EDCs to fund projects that "promote or develop new or expanded business enterprises," and, for cities with small populations, do not always require an explicit job-creation requirement.
Sarah said EDC-funded projects typically must be memorialized in a written economic performance agreement when the EDC alone is providing grants or loans: "Anytime the EDC wants to grant or loan funds to somebody for a project, it needs to be in the form of some kind of written performance agreement because it involves the use of tax money." She described that such agreements normally include benchmarks, recapture provisions if benchmarks are not met, and terms for repayment when applicable.
Board members asked for several clarifications. One member corrected an early remark about council approval thresholds, noting the local threshold for requiring council approval is $5,000, not $10,000. Sarah also noted the EDC may set aside up to 10 percent of annual revenues for promotional or marketing purposes. She listed eligible project categories for type B EDCs that commonly include streets and roads, drainage, water-supply facilities, parks and certain public-safety facilities.
On joint arrangements, Sarah said EDCs cannot independently adopt Chapter 380 economic development agreements (commonly called 380 agreements) but can participate with the city in a 380 agreement when the city leads. She also discussed a "Chapter 312" tax abatement-style agreement as a tool the city can form; Bandera has used combinations of these tools in past projects, she said.
The board questioned past real-estate purchases made by earlier EDC boards that remain undeveloped. Several members said some parcels are shown on city maps as parks but have not been improved. Sarah advised that, depending on board goals, the EDC should either create and execute a project for an owned parcel or consider selling or conveying the property — including to the city — rather than simply holding it without development.
Members also raised liability and insurance concerns tied to indemnification language in the EDC bylaws. One member asked whether EDC directors are covered under the city's directors-and-officers insurance. Sarah said coverage would depend on the specific policy language and that "we'll have to verify" whether the EDC board members are included; she agreed the group should confirm whether indemnification obligations would be paid from EDC assets if no applicable insurance applies. "If there's no insurance policy to cover it and it's something that the EDC does have to indemnify the city for, then yes, it would be coming from EDC assets," Sarah said.
Board members also discussed administrative arrangements. The bylaws allow the EDC to contract with the City of Bandera to use city staff (for example, the city secretary or city attorney) for agenda preparation, minutes, audits and other administrative tasks; Sarah said this is a common practice among small-city EDCs.
The presentation materials and a slide deck will be circulated to the board for reference, Sarah said, and board members asked staff and counsel to confirm two items: whether current EDC directors are covered under the city's directors-and-officers policy and what, if any, formal process is needed to convey or dispose of EDC-owned parcels. The workshop was adjourned with no formal action taken.
