Updated: Commissioners vote to not fund OCEDC
David Ball – For The Record
It was a move that caught many off guard.
The Orange County Commissioners Court voted to withhold the annual $68,000 funding to the Orange County Economic Development Corporation at their regular meeting on the afternoon of July 27.
County Judge Brint Carlton, Precinct 3 Commissioner John Banken and Precinct 4 Commissioner Jody Crump voted for the motion while Precinct 1 Commissioner David Dubose and Precinct 2 Commissioner Barry Burton voted no.
There was a first motion prior to the motion to withhold funding to the OCEDC. The first motion was to keep things the same between the county and the OCEDC. Dubose, Burton and Banken voted aye for that motion while Carlton and Crump voted nay.
John Gothia with the Greater Orange Area Chamber of Commerce summed up the proceedings when he said, “I was surprised. We want to see the county succeed. Maybe we can all work together.”
After the vote, Banken said he wanted to give County Judge Brint Carlton a chance to come up with a plan.
“I respect the judge’s decision to get a plan to bet businesses in the county. There has been very little the last 10 years,” Banken said.
Dubose said he’s “just disappointed” in the turn of events.
Prior to the voting, Carlton said the commissioners have been reviewing the county’s programs and policies since January 1. Pertaining to the OCEDC he said there were three options for the county: dedicate more funds through a half-cent property tax increase, let things remain the same, or do something else.
Banken asked how they would do the half-cent property tax increase. Carlton said they could dedicate the half-cent increase for an Economic Development fund instead of placing it in the General Fund. Currently, $371,000 per month in placed in the General Fund.
Bobby Fillyaw, executive director for the OCEDC, said the highest level they can be taxed at is at 8.25 percent. The cities in the county contribute a half-cent as does the county. Anything related to the OCEDC payroll is reimbursed to the county.
Banken asked if a decision must be made that day. Fillyaw said it’s an election item that could be placed on the ballot.
“We don’t get enough communication from the board,” Banken said. “If the county puts money in there, I’m opposed to not getting results. We need open communications.
“We must get more business into the county. Somebody has to pay these taxes and not just the taxpayers.”
Burton said there’s not question the county needs an organization like the OCEDC.
“It needs some tweaking, but businesses need a point of contact in the county and they know what’s going on,” he said.
Carlton said there’s many residual funds not being utilized by the OCEDC and it’s audited after the fact. Fillyaw said he was looking at the budget numbers and not the audit. Additionally, the magazine put out by the OCEDC didn’t reach its target amount.
Carlton agreed there’s a need for an EDC, but he didn’t know what form of fashion it would take.
Fillyaw said there was $100,000 in the fund balance for the past year. This year there is $70,000 and $30,000 has budgeted out of that.
“We’re short on revenues on the magazine side. We’ve lost a revenue share from the city (of Orange) for $30,000,” he said.
The city of Orange voted to withhold their $25,000 yearly contribution to the OCEDC at their July 14 due to what they say was a lack of communication from the OCEDC board.
“With all the budget problems we have now, do we have the money?” Crump asked.
Banken said the county will have to borrow money, either $3 million or $4 million to make it to the end of the year.
“People haven’t had a raise in seven years. We cannot make a good decision on where the money will come from,” Banken said. “We need to make a decision to either stay in the EDC or to pull out.”
Burton said to continue as is seemed like the plan to take to him.
Carlton said that Jefferson County doesn’t have an EDC and the chambers of commerce do the work.
Banken said Orange County can’t compare itself to Jefferson County.
Dubose said he and Carlton serve on the board of directors of the OCEDC and the OCEDC brought everyone together as one in unity.
“The city of Orange’s decision doesn’t have to influence us. We need to show strength in unity and make a motion to leave as is and to study it,” Dubose said. “The city of Orange is not in it but it will reap the benefits anyway. We can’t go forward. We need to bring businesses here and get more rooftops here to bring taxes down.”
Carlton asked Fillyaw how many agreements with businesses doe the OCEDC have under its belt. Fillyaw there were three 381s (agreements which keep 100 percent of the businesses’ property values off the tax rolls, but they receive revenues from the county) and two abatements.
Crump asked how much those were worth a year in which Fillyaw answered $140,000. He added those numbers will increase in seven to eight years.
For instance, Jefferson Energy Companies agreement is worth $130,000. That number will drop and then flat line. LaPoint and STI are $140,000 total with others in the works.
Carlton said the county is hard-pressed to come up with the money.
Dubose said if the county hires a professional consultant to do EDC work, that consultant won’t care about Orange County.
Crump said there is only three projects completed in 10 years totaling $140,000.
Banken asked Carlton as the CEO of Orange County what should be done.
“Should we pay money and keep it limping along or find other ways?” Banken asked.
Burton said commissioners should had began talking about this issue in March rather than in July.
“Do we have to tell businesses coming in we don’t have an EDC anymore?” Burton asked.
Carlton said if the county did pull out they would do something else instead of the OCEDC.
“I have no plan but I know consulting groups to do it. Groups much larger than a two-person (Fillyaw and Administrative Assistant Shirley Zimmerman) shop, but I haven’t investigated it,” Carlton said.
Burton asked how long it would be before the private professional consultant would be hired. Carlton said at least by October 1. He added August 1 is the last day to make a decision about funding the OCEDC.
“I think we’re messing up as a court to make a decision mid-stream. This is not the time to bail out,” Dubose said.
Carlton replied the biggest city, Orange, is not part of the unity Dubose earlier spoke about and Carlton and Dubose are only two board member among nine others on the OCEDC board.
Banken said it would not look good to the public to have a split vote on this subject.
Dubose said the city of Orange pulled out because of a lack of communication from the OCEDC board.
“I don’t think we need to follow Orange,” he said.
Carlton said it was due to a lack of funding for the OCEDC to be successful.
“It’s not a personality issue. We still keep paying $68,000 a year for three projects per decade,” Carlton said.
Crump asked what would happen after October 1. Carlton said the county’s membership with the OCEDC would end and the county would need an alternate plan in place.
Fillyaw said there are 10 projects in the works valued from $6 billion to $8 billion. Some would take six months to develop while others would take five years.
Burton said if the OCEDC is not funded by the county, it will go away and there would be a vacuum for six to 12 months while something else was starting.
Crump said the county was making a $68,000 contribution with no plan.
“I don’t know what will happen,” he said.
In other county business, no action was taken on the Texas Association of Counties Health and Employee Benefits Pool Program for 2015-2016 fiscal year. It will become effective on October 1, 2015.
Minnie Hightower, Human Resource Director, said a decision needed to be made by August 3.
The program called for a 9.82 percent annual increase. Hightower said those age 65 and over were carved out leaving a 7.2 percent annual increase.
She said the decision the court has to make is to either pay for 100 percent for employees by the county or split the costs between the county and the employees. The increase will be for $40 per month per employee.
Banken said he thinks the county should pay the 100 percent.
Lastly, a resolution approved two weeks ago revealed Orange County will receive $1,189,746 for their claim against BP and the Deepwater Horizon oil spill and the county’s full and final settlement.