HomeMy WebLinkAboutTML 2022_Economic Development Presentation (4871-3319-7368.1)Charles E. Zech
Denton Navarro Rocha Bernal & Zech, P.C.
Type A and Type B Economic Development Corporations and City Councils
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What is the role of an Economic Development Corporation?
Role
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Authority
Texas Local Government Code
Chapter 501 - Provisions governing Development Corporations
Chapter 502 – Provisions Applicable to Type A and Type B Corporations
Chapter 504 – Type A Corporations
Chapter 505 – Type B Corporations
ED Corporations
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Texas Business Organizations Code
Chapter 22 – Non-Profit Corporations Act
See Texas Local Government Code Section 501.054:
GENERAL POWERS, PRIVILEGES, AND FUNCTIONS. (a) A corporation has the powers, privileges, and functions of a nonprofit corporation incorporated under the Texas Non-Profit Corporation
Act (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes) or formed under the Texas Nonprofit Corporation Law, as described by Section 1.008, Business Organizations Code. To the
extent that the provisions governing powers, privileges, and functions of a nonprofit corporation under those laws are in conflict with or inconsistent with provisions of this subtitle
governing powers, privileges, and functions of a nonprofit corporation, the provisions of this subtitle prevail.
ED Corporations
Authority
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Tax is primarily intended for manufacturing and industrial development primary job creation and may be used to acquire or pay for land, building equipment, facilities, expenditures,
targeted infrastructure and improvements for purposes related to:
Revenue Use - Type A Sales Tax
ED Corporations
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Provides cities with a wider range of uses and includes projects for quality-of-life improvements, including economic development that attracts and retains primary employers.
ED Corporations
Revenue Use - Type B Sales Tax
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The Economic Development Corporation is a Distinct and Separate Corporation from the City.
YES OR NO
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Texas Local Government Code
Section 501.051 - Authorizes Creation of the Corporation
Section 501.056 - Approves the Certificate of Formation
Section 501.062 – Appoints the Board of Directors
Section 501.064 - Approves the By-laws
Section 501.073 – Approves all programs and expenditures of the corporation and annually reviews any financial statements; is entitled to access to the corporate books and records
Section 501.007 – a municipality may not lend its credit or grant public money or another thing of value in aid off the corporation except under a contract authorized under TLGC Section
380.002 (Grants of public money by cities over 100,000 in population.
The “Authorizing Unit”
Emphasize the fact that City Council has full “control” over projects, programs and expenditures. Importance of working together
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Type A - City’s governing body appoints at least a five-member board for a term not to exceed six years.
Type B - City’s governing body appoints a seven-member board for two-year terms. Three of the seven cannot be employees, officers or members of the city’s governing body.
Boards Serve at the Will and Pleasure of City Council
Board Make Up
Policy on Board Make up – What is the purpose of the Board?
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The Economic Development Corporation is a Distinct and Separate Corporation from the City.
YES OR NO
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Relationships between Boards and City Councils are becoming more fractured than usual.
Statement of Fact?
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Shrinking dollars
Unfunded mandates
Shrinking revenues
Cities on the hunt for dollars
Current Realities
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These realties have resulted in increased conflicts between City Councils and Boards of Directors.
Current Realities
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The EDC should not be a tool of the City.
It should be a partner in desired outcomes.
Role
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Checks and Balance?
Vetting?
Role
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Wholly “Independent”
Partially “Independent”
Wholly “Dependent”
Structure
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Clear Goals and Objectives
Alignment
Solid Relationships
Appropriate Use of Tax Dollars
Desired Outcomes
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sym·bi·ot·ic
simbīˈädik/
adjective
Denoting a mutually beneficial relationship between different people or groups.
Desired Outcomes
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Getting There
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Communicate and Collaborate
At Board level
At Staff Level
Communication should be a 2-way street
Get Feedback
Set Clear Goals
Understand who does what
Don’t Micro-Manage
Getting There
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What is the role of an Economic Development Corporation?
Role
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Alignment
EDC Goals
Economic Development
City Council Goals
Development
Regulatory
Economic Development
The Law
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Alignment
Alignment
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Questions?
Charles E. Zech
cezech@rampagelaw.com
Denton Navarro Rocha Bernal & Zech, P.C.
Austin: 2500 W. William Cannon Dr., Suite 609
Austin, TX 78745-5257
(512) 279-6431
San Antonio: 2517 N. Main Ave
San Antonio, TX 78212-3111
(210) 227-3243
RGV: 701 East Harrison, Suite 100
Harlingen, TX 78550
(956) 421-4904
TGC: 549 N. Egret Bay Blvd., Suite 200
League City, TX 77573
(832) 632-2102
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