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HomeMy WebLinkAboutTML 2022_Economic Development Presentation (4871-3319-7368.1) (2)Charles E. Zech Denton Navarro Rocha Bernal & Zech, P.C. Type A and Type B Economic Development Corporations and City Councils What is the role of an Economic Development Corporation? Role 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 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 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 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 The Economic Development Corporation is a Distinct and Separate Corporation from the City. YES OR NO 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” 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 The Economic Development Corporation is a Distinct and Separate Corporation from the City. YES OR NO Relationships between Boards and City Councils are becoming more fractured than usual. Statement of Fact? Shrinking dollars Unfunded mandates Shrinking revenues Cities on the hunt for dollars Current Realities These realties have resulted in increased conflicts between City Councils and Boards of Directors. Current Realities The EDC should not be a tool of the City. It should be a partner in desired outcomes. Role Checks and Balance? Vetting? Role Wholly “Independent” Partially “Independent” Wholly “Dependent” Structure Clear Goals and Objectives Alignment Solid Relationships Appropriate Use of Tax Dollars Desired Outcomes sym·bi·ot·ic simbīˈädik/ adjective Denoting a mutually beneficial relationship between different people or groups. Desired Outcomes Getting There •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 What is the role of an Economic Development Corporation? Role Alignment EDC Goals •Economic Development City Council Goals •Development •Regulatory •Economic Development The Law Alignment City Council Goals -Development -Regulatory -Economic Development The LawEDC Goals -Economic Development Alignment Questions? Charles E. Zechcezech@rampagelaw.com Denton Navarro Rocha Bernal & Zech, P.C. Austin:2500 W. William Cannon Dr., Suite 609Austin, TX 78745-5257(512) 279-6431 San Antonio: 2517 N. Main AveSan Antonio, TX 78212-3111(210) 227-3243 RGV:701 East Harrison, Suite 100Harlingen, TX 78550(956) 421-4904 TGC:549 N. Egret Bay Blvd., Suite 200League City, TX 77573(832) 632-2102