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Council closes Josephine CDC account, transfers remaining funds to city general fund pending MDD setup
Summary
The council approved the FY2024–25 annual budget for the former Josephine Community Development Corporation and a resolution transferring remaining JCDC funds to the city’s general fund while the Municipal Development District (MDD) is being stood up; motion carried 4-1.
The City of Josephine on Sept. 8 approved the fiscal year 2024–25 budget for the former Josephine Community Development Corporation (JCDC) and adopted a resolution transferring the remaining JCDC funds, less bank fees, into the city’s general fund and closing the JCDC bank account.
Discussion centered on a Municipal Development District (MDD) account that staff reported is already open and receiving state deposits. Some council members argued the remaining funds should be moved directly into the MDD bank account because the district exists and has restrictions on allowable uses. Others urged caution, noting the MDD board and bylaws are not yet formally established and that moving funds to an account without staff and approved bylaws could hamper ongoing projects that rely on disbursements.
City staff recommended transferring the remaining JCDC balance into the city’s general fund as a tracked line item until the MDD is fully constituted, after which the funds can be moved or allocated by the MDD under its bylaws. Council members said the JCDC funds should not be spent without the MDD governance and budget in place.
Council voted 4-1 to approve the JCDC budget, transfer remaining funds to the city general fund and close the JCDC account. Council and staff said they expect to finish the MDD establishment steps (bylaws, appointments) in the near term and to track the transferred funds so they are available for MDD-authorized projects once the district governance is in place.
Authorities and references: During discussion, a council member cited Local Government Code Title 12, Chapter 505 and referenced Texas Attorney General opinions noted in the packet (cited verbally as “JC0118” and “GA01819”) concerning development corporation purposes and limits on spending. City staff said the funds currently in the MDD account are being deposited automatically and are not being spent until the MDD has an authorized board and adopted budget.
