Killeen officials are expected to consider revisions to the structure of the town’s economic development corporation on Tuesday, but that doesn’t mean changes are imminent.
“Looking at this presentation, I think we’re trying to break down different options,” said Killeen Councilman Jose Segarra. “The town has an agreement with the (Greater Killeen Chamber of Commerce), so we basically outsource the KEDC. But is outsourcing the only thing? I think the way we have it is best.
Each of the past two fiscal years, Killeen has provided $362,527 of its water and sewer and general funds for the Killeen Economic Development Corporation.
“They can use that money to offer incentives,” Segarra said. “We’re probably giving more than we’re getting when trying to attract business. We are in competition with other cities.
Under Texas law, economic development corporations can use their funding for Chapter 504 agreements — the local government code law that allows them to offer financial packages to help secure potential business.
“As EDC, you put all these feelers on and it’s a waiting game,” Segarra said. “You try to grab a business and sometimes it’s a process.”
EDC’s mission “is to promote the development of commercial, industrial and manufacturing enterprises in order to promote and encourage employment and public welfare,” according to its website. “KEDC members are also instructed to work closely with the Killeen Industrial Foundation and the Greater Killeen Chamber of Commerce.”
Segarra is a former Mayor of Killeen and once a member of EDC’s Board of Directors.
“We try to be as competitive as possible,” he said. Incentives could include “rebates or tax incentives, such as when a company does a construction.”
A common Chapter 504 deal involves tax abatements that typically range from five to 10 years, exempting all or part of the increase in the value of real or personal property.
Killeen Mayor Debbie Nash-King said EDC could divert some sales tax revenue to help fund EDC. But that would mean creating a Type A or Type B corporation, both of which would require voter approval.
“One of the board members suggested that (City Manager Kent Cagle) come back with different ways to structure KEDC,” she said. “The Town of Killeen may fully fund EDC, or sales taxes may go to KEDC. We do not run KEDC. We just give them funds to bring businesses to our area.
Cagle did not return a message seeking comment, and EDC chief executive John Crutchfield was unavailable. Janell Ford, executive director of communications for Killeen, declined to comment.
“It is our policy that we do not discuss items with the media/public before they are presented or discussed with the board,” she said in an email. “Everything will be public at the council meeting, however.”
According to the Texas Comptroller’s website, Type A sales tax revenue is “primarily intended” for manufacturing and industrial development. TFCs using this form of financing can use their revenues to pay for land, equipment, buildings and “targeted infrastructure and improvements” for certain projects.
As a Type B corporation, EDC can use sales tax revenues for the same Type A projects, in addition to funding sports, tourism and entertainment facilities, convention centers and public parks and infrastructure. related. Revenues can also be used for public safety buildings, demolishing existing structures and “general” improvements owned by the municipality.
A Type A or Type B designation would allow voters in Killeen to decide whether or not to use a portion of the town’s optional 2% local sales tax to fund economic development.
In 1990, voters elected to impose the 2% local sales tax, with 1.5% used to offset city property taxes. The other 0.5% was allocated to Bell County. At 8.25 percent sales tax, the city has capped its rate under state law. The state sales tax rate is 6.25%.
As far as the chamber is concerned, any change in the structure of the EDC is likely to have an impact on this organization as well. In September 1987, the city reached an agreement with the chamber obliging it to:
Plan, organize and direct the “economic development program” of the city.
Coordinate the economic development activities of the various stakeholders.
Liaise with the Governor’s Office for Economic Development and other organizations.
Prepare and administer a budget and work program for economic development.
Maintain an economic development website.
Initiate and maintain contact with business prospects to promote their location in Killeen.
Develop and present programs to business prospects regarding opportunities in Killeen.
Conduct public information programs regarding development activities.
The chamber has over 700 members and associates who pay monthly or annual dues ranging from $100 per month to $3,600 per year.
As part of its agreement with the city, the chamber is required to submit monthly financial, board and “consolidated economic development” reports, as well as a report that “tracks performance metrics, financial accounting and the action plan established by the agreement. ”
According to this agreement, the City’s money can be spent on day-to-day operations, supplies, salaries, office rental, travel expenses and administrative expenses.
“It’s kind of a partnership,” Segarra said. “And I think that’s a smart way to do it.”
In addition to seeking voter approval to create a Type A or Type B CDE, the city council could choose to create its own economic development department.
“What I’ve heard in the past is that we could have it run by the city,” Segarra said. “We would do it ourselves, but it would be much more expensive.
This option would likely mean hiring more staff at city hall and diverting current resources to additional city service.
The EDC and chamber are in the same building – the old Santa Fe Depot – on Santa Fe Plaza Drive in downtown Killeen.