07/13/2006-4B-Agenda Packet-RegularAGENDA
4B Sanger, Texas Development Corporation
Thursday, July 13, 2006
7:00 P.M. -201 Bolivar
1. Call Meeting to Order.
2. Approval of Minutes: June 1, 2006
3. Discuss and Possible Action for Funding Projects for the Next 1 to 3 Years.
4. List of Future Agenda Items.
5. Adjournment.
This facility is wheelchair accessible and accessible parking spaces are available. Requests
for accommodations or interpretive services must be made 48 hours prior to this meeting.
Please contact the City Secretary's office at (940) 458-7930 for further information.
MINUTES:
MEMBERS
PRESENT:
MEMBERS
ABSENT:
OTHERS
PRESENT:
4B SANGER, TX DEVELOPMENT CORPORATION
JUNE 1,2006
President Nel Armstrong, Glenn Ervin, John Springer, Thomas Muir,
Beverly Branch
Kim Shaw and John Payne
Rose Chavez, City Secretary/Asst. City Manager, Cecile Carson,
Economic Development Director, John Henderson, Street/Parks
Superintendent, Paul Edleman, Chairperson Parks Board
1. President Nel Armstrong Called Meeting to Order.
2. Approve of Minutes: May 4, 2006
Motion was made by Thomas Muir to approve minutes as presented. Seconded by
Glenn Ervin.
Motion carried unanimously.
3. Discussion and Motion to Proceed with Quail Run Park Project in regards to Public
Hearing and Public Notice.
Paul Edelman addressed the Board concerning Phase I and Phase II of the park
project. Phase I included playground equipment, a pavilion and a bike rack, at a total
cost of $52,074.00. Phase II included a basketball structure and all equipment that is
needed at a cost of $33,019.00.
If 4B agrees to fund both projects and the extra parking project the cost would be
$239,500. If the parking is not funded the cost for equipment for the park would be
$85,093.00.
They have contacted contractors to submit bid proposals; however, the contractors do
not want to come and take the time to submit the proposal not knowing they are going
to get the job or not.
The estimate on the parking was arrived by taking the cost that was spent at the
downtown park and breaking it down to get an initial cost on each parking area.
Discussion on walking trails, the trees to be planted, and the benches.
Thomas Muir inquired as to how did the $170,000 that was discussed at the last
meeting relate to this.
· Paul Edelman indicated that the $170,000 included $85,000 for Phase I and Phase II
of the Quail Run Project.
Discu~sion on the total cost of the completed project including Phase I, Phase II, Skate
Park and the parking, which were estimated at above $324,000.
Paul Edelman indicated that the skate phase of this park, ,vas removed due to
consideration of placing the skate ramp in another park within the city.
Thomas Muir asked how many parking spaces are in the park. Lengthy discussion
continued on the parking spaces and the cost.
Thomas Muir inquired if there was an idea about the traffic pattern and how would
it be determined.
Mr. Springer inquired as to how much initial planning went into this project. At the
last me~ting he understood the equipment was planned by an equipment company.
Mr. Edelman indicated that he was correct.
Mr. Springer asked that if they had a created plan themselves instead of having an
equipment company to bid on it would the result have been any different.
Mr. Edelman expressed that he did not know. The Parks Board is a recommending
board.
Mr. Edelman indicated that the Parks Board members did put a lot of thought into this
project in regards to the cost and the location of the park. The concern is the amount
of parking spaces and practice soccer fields.
Discussion followed on parking standards and planning of projects.
Mr. Springer indicated he would like a completed project that the community would
appreciate.
President Nel Armstrong expressed that the Board needs t~ be careful on how the
funds are spent in any projects to assure projects are completed with cost savings and
planning being considered.
Paul Edelman inquired on the directions they need t~ take. Public Hearings were
discussed in reference to the project and any other projects.
•
Cecile Carson recommended that they have a work session to discuss various projects
to fund next budget year, then the Board could pursue Public Hearings sometime in
August.
Mr. Springer made a motion to schedule a 4B workshop to discuss projects that the
City may consider for funding in the next 1-3 years.
Seconded by Glenn Ervin. Motion carried unanimously.
Board agreed for a called meeting to be scheduled on July 13.
Thomas Muir inquired that if the 4B had 3-4 projects that were considered would a
fmancial tool be considered to fund all the projects.
City Secretary indicated the corporation could borrow funds for these fund projects.
4. : Discuss and Possible Action on Transfer of Funds on the Salary for Director of
Economic Development.
City Secretary addressed the Board concerning a previous letter regarding the salary
of the Economic Development Director. The Board had ordinally agreed to fund½ of
the $45,000.00 and Mr. Carson was hired on January 23, 2006. The City Secretary
advised that the total amount to fund from this date to the end of the budget year
would be $18,715.42. City Secretary advised that she needed direction on how much
to transfer.
Discussion.
Thomas Muir inquired as to how the 4A voted.
City Secretary indicated that they agreed to fund 50% the salary from January 23, to
the end of the budget year and to fund 50% of the salary of $45,000.00 for another
budgeted year.
John Springer made the motion to fund 50% of the salary for the Economic Director
from January to the end of this fiscal year and to fund 50% of the salary for the 06-07
budget year. Seconded by Beverly Branch. Motion carried unanimously.
5. List of Future Agenda Items.
Discussed and action taken on Item 3 for future agenda item.
6. Meeting Adjourned.
Special Interest Carve-Outs
Perhaps the most potentially damaging aspect of HB
292B are the various geographic carve-outs. Certain
communities in the border region and the Dallas-Fort
Worth area succeeded in winning language that allows
them to play by their own set of rules. For example:
• Certain "land-locked" economic development corporations
in Dallas and Harris counties are now authorized to
use 4B revenues to finance direct incentives for retail
development projects. Essentially, the provision
enables a handful of suburban communities to operate
under the rules established to address the needs of
rural Texas.
• Certain economic development corporations near the
border are now authorized to spend 4A and 4B revenues
for the development or expansion of general airport
facilities.
• Economic development corporations in Hidalgo County
are now authorized to spend economic development
sales tax revenues on sewer or solid waste disposal
facilities, airports, and ports.
"1"1,.
• Economic development corporations in Hidalgo County ·
may now issue Industrial Revenue Bonds (IRBs) for
infrastructure projects that do not create primary jobs.
Legislative History
The DCA defines a primary job as a job.that is: (1) avail-
able at a company for which a majority of the products
or services of that company are ultimately exported to
regional, statewide, national, or international ma"rkets,
infusing new dollars into the local economy; and (2)
included in one of the following sectors of the North
American Industry Classification System (NA/CS).
111 Crop Production
112 Animal Production ""
113 forestry and Logging
11411 Commercial Fishing
115 Support Activities for Agriculture and
Forestry .
211-213 Mining
221 Utllltles . .
311-339 Manufacturing
42 ., Wholesale Trade ,.
48-49 Transportation and Warehousing
51 !~formation, excluding movie theaters
(51213) and drive-In theaters (512132)
• Securities, Commodity Contracts, and Other
FinanclaJ lrive~tments and Related Activities; __ 523-525 ~~ lllsiifance'cafritr'S, Rl!lated Activities; Funds. "'
Trusts, 'and Other Financial Vehicles
5413, 5415, 5416, ' Scientific Research and Development Services
5417, and 5419551 Manage"ment of Companies and Enterprises
56142 Telephone Call Centers (NEW) .
922140 -Correctional Institutions
928110 National Security (NEW)
Over the past 15 years, Texas lawmakers have passed dozens of laws pertaining to the economic development sales tax.
One of the most significant changes was the creation of the "4B" tax in 1991, which broadened eligible uses of economic
development sales tax revenues from traditional economic development activities to community development. ·•
;;,
• Th1frexas Legislature has amended Section 4A of the DCA 27 times and Section 4B 36 times. Major legislative changes
to the economic development sales tax statute are presented in the timeline below.
••11'!1illfi:r
•:~TEDC www.texasedc.org Page Two
~:-~~"'--
Differences Between the 4A and 4B
Economic Develop_ment Sales Tax.
This practitioners guide offers a quick snapshot of what
you can do with economic development sales tax dol-
lars. It is in no way intended to substitute for the
advice and counsel of your local attorney or the in-depth
training materials you receive at one of the TEDC's
regional training seminars.
i 4A Eligib/e_!_rc,jects -
Land, buildings, equipment, facilities, improvements,
and expenditures related to:
• Manufacturing, industrial, research & development,
recycling, small warehouse and corporate headquarter
facilities, and distribution centers.
• Closed or realigned military bases.
• Job training for primary jobs and commercial/retail.
• Business airport facilities and port-related facilities.
• Clean up of contaminated project sites (with a special
election and specific ballot language).
• Projects designed to attract new military missions, prevent
the closure of existing missions, and redevelop a
closed or realigned military base. (m3
• General airport facilities for communities located 25
miles from US/Mexico border only. (m3
• 4B projects with voter approval.
i 48 Elig!'?.fe Projects
• Everything authorized under 4A of the DCA, including
retail and commercial projects with the same restrictions.
• Water supply facilities (with a special election and
specific ballot language).
• Projects that improve a community's quality of life,
including parks, professional and amateur sport and
athletic facilities, tourism and entertainment facilities,
affordable housing, and other improvements or
expenditures that promote new or expanded business
activity that create or retain primary jobs.
• Projects designed to attract new military missions, prevent
the closure of existing missions, and redevelop a
closed or realigned military base. (m3
• Infrastructure assistance to retail or commercial projects. • Solid waste disposal facilities in Hidalgo County. (m3
• Business-related sewer utilities and site
improvements. am)
~TEDC
~~,:!:;'"'c'°OUtiCI.
• Direct incentives for retail development in communities
with fewer than 20,000 residents and certain land-locked
cities in Dallas and Harris counties.
www.1exasedc.org Page Three
The Texas Economic Development Sales Tax:
A Primer for Local Officials
2005 Update
Overview
0 ver the years, the economic development sales tax
has become the backbone of local efforts to bring
new jobs and investment to Texas communities.
The tax was created in 1989 by legislation authored by
State Senator Bill Ratliff of Mount Pleasant to give smaller
Texas communities the financial resources to build effective
economic development programs and offer financial
incentives to attract primary jobs.
As of July 2005, voters in 537 Texas communities have
approved the tax-more than half of which have less
than 5,000 residents. The broader 4B tax continues to be
the more popular choice for Texas communities. As of
July 2005, 318 cities have,passed the 4B tax, compared to
122 cities with the 4A tax. Nearly 100 cities impose both
the 4A and 4B. tax.
. .
KEY TERMS
The Development Corporation .. Act of 1979 (DCA)
is the law that regulates the use of the economic
,development sales tax. The ,DCA is f.ound fin
Article 5190.6 of Vernon's Civil Statutes. Sections
4A, 4B, and 4C of the DCA rel~te to the economic
development sales tax. .
Econon:aic Development Corporations are Jhe
legal entities with the statutory authority to
•1 spend economic development sales tax dollars. . -~ The corporations are city-chartered and
governed by a city-appointed board of directors.
Corporations are typically referred to either ps
"4A" or "4B" .depending on the type of econo"'1ic
development sales tax uses approved by local
: !1 voters ..
'
Primary Jobs are jobs that infuse new dollars into
the loc~I economy by creating or selling a produq:
or service that is ultimately exported to regional,
statewide, national, or international markets. :
"
Recent Changes to the Economic
Development Sales Tax
Economic development is about primary jobs and
wealth creation. That's why the T~xas Legislature
passed HB 2912 in 2003. The legislation, which was
suppo,:ted by the TEDC, eliminated loopholes in the DCA
that enabled Texas communities to u~e 4A and 4B tax
revenues in ways never envisioned, such as building fire
stations and city halls.
In 2005, Texas lawmakers passed legislation (HB 2928),
which reinserted the loopholes that were eliminated
back in 2003. Although the TEDC remained neutral on
language in HB 2928 that granted small, rural communities
additional flexibility to attract retail development, our
members strongly opposed "carve out" language that
gave certain Dallas-Fort Worth area and border communities
their own set of rules.
Changes affecting communities with
fewer than 20,000 residents
Early supporters of the economic development sales tax
never intended that it be used to support retail development.
Nonetheless, over the years, rural communities have
embraced the economic development sales tax as a tool
to attract retail establishments to their communities.
HB 2928 included language that makes it easier for
economic development corporations created by cities
with less than 20,000 residents to spend 4B revenues on
direct incentives to promote new and expanded business
development. The law requires that cities approve by
resolution, .after two separate readings, expenditures of
this nature that exceed $10,000. The new rules enable
these small communities to directly finance retail develop-
ment projects, such as offering cash grants or incentives
to a Walmart store or Red Lobster restaurant. Although
the TEDC does not believe this is the most effective use
of economic development sales tax revenues (because
retail is a secondary economic activity), we remained
neutral on this provision of HB 2928 because we under-
stand the challenges facing rural Texas communities.
www.texasedc.org Page One
TEXAS ECOHOMIC
0E~LOPMENT COUNCIL
The Economic Development Sales Tax:
Working for Texas
The economic development sales tax is the state's
largest and most effective local revenue source for
economic development. The best way to protect
the tax for years to come is to use it with caution, care,
and common sense.
The Texas Economic Development Council (TEDC) will
continue to advocate, educate, and inform economic
development professionals on developments related to •
the tax, including best practices and statutory changes.
TEDC members will.also closely monitor special interests
that have their eye on the tax as a. funding source for
loca! projects that fall outside the scope of economic
, development, such as hospitals and community colleges.
The Texas Economic
Development Council
has proudly-been
the most vocal and
effective supporter
of the economic
development sales tax
-
Other useful resources on the economic
development sales tax can be found at:
• "Handbook on Economic Development Laws for
Texas Cities," 2004. This publication, produced by the
Intergovernmental Relations Division of the Office of
the Attorney General, provides a comprehensive legal
and technical overview of major economic develop-
ment laws, including the economic development sales
tax. The full report can be downloaded from publica-
tions P,age of the Office of the Attorney General's web
site at www.oag.state.tx.us. Note: This version of the
report does not include changes enacted by the 2005
Texas Legislature.
'• "Economic Development Sales Tax," June 2004
(Publication #96-302). This brochure provides a tech-
nical summary of the economic development sales tax,
including detailed information on how communities
must a_dminister the tax. The brochure can be down-
loaded from the Comptroller's web site under tax
information/tax publications.
.
since its creation.
• ".Econorl'lic Development Corporation Report, Fiscal
Years 2002 and 2003," 2004. This report, published
every two years by the Comptroller of Pubic Accounts,
analyzes expenditures made by 4A and 4B develop-
ment corporations. The report is produced to comply
with legislative reporting requirements established by
HB 1410 in 1999. The full report may be downloaded
from Comptroller's web site at:
http://www.window.state.tx.us/lga/edcr0003/.
• "Texas Economic Development Incentives," March
2003. A special report that includes chapters on the
economic development sales tax and public economic
development corporations. The full report may be
downloaded from the Comptroller's web site at:
http://www.cpa.state.tx.us/special rpt/ecodev03/.
For more informijtion about the ~conomic,development sales tax, contact:
• Carlton Schwab, Texas Economic Development Council ,.
Pho~e: (5_12) 480-8432. Email.: carlton@t~?asedc.org
• Bob Bearden, Local Government Assistance Division, Com·ptroller of Public Accounts
Pho~e: (512) 463-42~9. Emaili bob:bearden@cpa.state.tx.us ,
• Julia~ Grant, Assistant Attorney General for Municipal Affairs, Officr of the Attorney Generaj
Phone: (512) 475-4683 .. Email:·julian.gra6t@oag.state.tx.us
·*~TEDC
.. ' TEXAS ECONOllte
DEVELOPMENT COUNCIL
www.texasedc.org Page Four
7-12-2006 12:23 PM
42 -4B CORPORATION
ASSETS
ACCOUNT NO# TITLE
CASH MONEY MARKET
4B CD#6669
RECEIVABLE-OTHER
DUE FROM GEN. FUND
00-1010
00-1012
00-1053
00-1060
00-1062 AMT TO BE PROVIDED FOR L-T-D
LIABILITIES AND FUND BALANCE
00-2201 N/P GNB
REVENUES
EXPENSES
00-3020
00-4425
00-4800
00-4940
00-4985
76-5200
76-5210
76-5215
76-5220
76-5225
76-5410
76-5420
76-5450
76-6500
FUND BALANCE
STATE SALES TAX
INTEREST INCOME
DONATIONS
TRANFERS OUT TO 4B/PARK EXP
CHECK CHARGES
OFFICE SUPPLIES
TRAVEL & REGISTRATIONS
DUES
PUBLICATIONS/SUBSCRIPTIONS
INSURANCE
CONTRACTUAL SERVICES
ENGINEERING FEES
PROJECTS
•••TOTALS•••
C I T Y O F S A N G E R
TRIAL BALANCE
AS OF: JUNE 30TH, 2006
•••• MONTH TO DATE****
DEBITS
16,607.51
3,838.04
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
100.00
0.00
22,007.42
42,552.97
CREDITS
13,031.43
2,078.36
1,659.68
23,063.99
2,719.51
42,552.97CR
***** YEAR TO DATE*****
DEBITS
24,898.98
506,791.15
17,704.51
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
900.00
0.00
150,299.42
700,594.06
CREDITS
508,289.89
170,277.21
22,026.96
700,594.06CR
PAGE: 1
,. 7-12-2006 12:22 PM
42 -4B CORPORATION
REVENUE SUMMARY
4B REVENUES
*** TOTAL REVENUES ***
EXPENDITURE SUMMARY
76-4B EXPENSES
*** TOTAL EXPENDITURES***
** REVENUES OVER(UNDER) EXPENDITURES**
TOTAL OTHER FINANCING SOURCES (USES)
C I T Y O F S A N G E R
FINANCIAL STATEMENT
CURRENT
BUDGET
220,000.00
220,000.00
181,800.00
181,800.00
38,200.00
0.00
0.00
0.00
AS OF: JUNE 30TH, 2006
CURRENT
PERIOD
25,783.50
25,783.50
22,107.42
22,107.42
3,676.08
0.00
0.00
0.00
Y-T-D
ACTUAL
192,304.17
192,304.17
151,199.42
151,199.42
41,104.75
0.00
0.00
0.00
\ OF
BUDGET
87 .41
87.41
83.17
83.17
107.60
0.00
0.00
0.00
Y-T-D
ENCUMB.
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
PAGE: l
BUDGET
BALANCE
27,695.83
27,695.83
30,600.58
30,600.58
2,904.75)
0.00
0.00
0.00
7-12-2006 12:22 PM
42 -4B CORPORATION
IUES
CITY OF SANGER
FINANCIAL STATEMENT
CURRENT
BUDGET
AS OF: JUNE 30TH, 2006
CURRENT
PERIOD
Y-T-D
ACTUAL
% OF
BUDGET
Y-T-D
ENCUMB.
PAGE: 2
BUDGET
BALANCE
----------------------------------------------------------------------------------------------------------------------------------. '
REVENUES
4B REVENUES
00-4425 STATE SALES TAX
00-4800 INTEREST INCOME
00-4940 DONATIONS
TOTAL 4B REVENUES
*** TOTAL REVENUES ***
220,000.00 23,063.99
0.00 2,719.51
0.00 0.00
220,000.00 25,783.50
220,000.00 25,783.50
============== ==============
170,277.21 77 .40 0.00 49,722.79
22,026.96 0.00 0.00 22,026.96)
0.00 ____Q_,_Q_Q 0.00 0.00
192,304.17 87.41 0.00 27,695.83
192,304.17 87.41 0.00 27,695.83
============== =============== ==============
7-12-2006 12:22 PM
42 -4B CORPORATION
00-NON-DEPARTMENTAL
TMENT EXPENDITURES
*** DEPARTMENT TOTAL ***
CITY OF SANGER
FINANCIAL STATEMENT
CURRENT
BUDGET
0.00
AS OF: JUNE 30TH, 2006
CURRENT
PERIOD
0.00
Y-T-D
ACTUAL
0.00
% OF
BUDGET
0.00
Y-T-D
ENCUMB.
0.00
PAGE: 3
BUDGET
BALANCE
0.00
7-12-2006 12:22 PM C I T Y 0 F SANG E R PAGE: 4
FINANCIAL STATEMENT
AS OF: JUNE 30TH, 2006
42 -4B CORPORATION
7"'-4B EXPENSES
:TMENT EXPENDITURES
)
CURRENT CURRENT Y-T-D % OF Y-T-D BUDGET
BUDGET PERIOD ACTUAL BUDGET ENCUMB. BALANCE
----------------------------------------------------------------------------------------------------------------------------------
52-SUPPLIES AND MATERIALS
76-5200 CHECK CHARGES 0.00 0.00 0.00 0.00 0.00 0.00
76-5210 OFFICE SUPPLIES 200.00 0.00 0.00 0.00 0.00 200.00
76-5215 TRAVEL & REGISTRATIONS 500.00 0.00 0.00 0.00 0.00 500.00
76-5220 DUES 250.00 0.00 0.00 0.00 0.00 250.00
76-5225 PUBLICATIONS/SUBSCRIPTIONS 200.00 0.00 0.00 0.00 0.00 200.00
TOTAL 52-SUPPLIES AND MATERIALS 1,150.00 0.00 0.00 0.00 0.00 1,150.00
54-CONTRACT SERVICES
76-5410 INSURANCE 100.00 0.00 0.00 0.00 0.00 100.00
76-5420 CONTRACTUAL SERVICES 28,500.00 100.00 900.00 3.16 o.oo 27,600.00
76-5450 ENGINEERING FEES 0.00 0.00 0.00 0.00 0.00 0.00
TOTAL 54-CONTRACT SERVICES 28,600.00 100.00 900.00 3.15 0.00 27,700.00
65-PROJECTS .,
76-6500 PROJECTS 152,050.00 22,007.42 150,299.42 98.85 0.00 1,750.58
TAL 65-PROJECTS 152,050.00 22,007.42 150,299.42 98.85 0.00 1,750.58
••• DEPARTMENT TOTAL ••• 181,800.00 22,107.42 151,199.42 83.17 0.00 30,600.58
--------------============== ============== ============== ============-=
*** TOTAL EXPENDITURES*** 181,800.00 22,107.42 151,199.42 83.17 0.00 30,600.58
OTHER FINANCING SOURCES (USES)
TOTAL OTHER FINANCING SOURCES (USES) 0.00 0.00 0.00 0.00 0.00 0.00
*** END OF REPORT***
•