Amid concerns about budgeting practices and a balanced budget, the Van Alstyne City Council approved the upcoming budget for the Van Alstyne Community Development Corporation, but tabled a similar budget by the city’s Economic Development Corporation. City officials cited a desire to see balanced, zeroed budgets for the organizations in their decision to table the EDC request.
The decision came during a series of three back-to-back meetings Tuesday night that went for nearly six hours. The City Council meeting was delayed by more than two hours due to a budget workshop that went longer than initially planned.
The EDC budget was presented by Director Jodi Carr, who joined the development corporation within the past year. This was the first budget that Carr has completed for the city.
“What we do is focus primarily on industry and manufacturers,” Carr said Tuesday, describing the role of the EDC. “It is about creating jobs — primary jobs — and the capital investment we bring into the city.”
As part of the changes proposed for the EDC, Carr said she wanted to renew a focus on the retention and expansion of the city’s existing industries. Through this, Carr said she hopes to grow the city’s revenues and economy from within rather than fully relying on bringing outside business to Van Alstyne.
“You want to dance with the one who brought you, and we’ve got the existing business here,” she said. “So you want to build and cultivate the relationships there.”
Tensions over the budget rose, when the council began to discuss the $43,000 deficit anticipated in the budget. However, Carr said this budget was based on conservative estimates for sales tax revenue. In reality, Carr said she believes the EDC will instead be under budget by about $25,000.
Karen Teuber, who is a long-time member of the EDC board of directors, said the budget has never been balanced since her time with the board. However, the EDC has ultimately always had enough funding or reserve funds to cover its expenses, she said.
“We know that if we did not meet that (expense), we would have the money to cover that,” she said.
Council Member Suzon Crowell asked that Carr go back and adjust the budget to be balanced and at zero with no deficit or surplus.
“How many years have we been working at a deficit,” Crowell said. “Because that can’t go on for long.”
Council Member Lee Thomas also voiced concern over the deficit vote, noting that the city is projected to raise its tax rate in the next fiscal year to maintain its revenue. Thomas stressed the importance of the EDC’s job in business recruitment and economic development in balancing the city’s revenue sources.
“As a citizen … seeing anything that is run on tax dollars run at a deficit is hard for me,” he said. “We are fixing to take a hit as the council and we are asking you to bring in more business so we can bring down that rate.”
When put out for a vote, the council ultimately chose to table the request in order to allow Carr to make a balanced budget in a vote of two-to-one, with Brad Clough against and Crowell and Thomas for the action. Councilors Teddie Ann Salmon and Robert Jaska abstained from the vote. The board also asked for documentation or clarification that if a deficit is necessary that it would be covered by the EDC.
Following the meeting, Carr said it would be difficult to fully balance the budget for an organization such as the EDC, given its reliance on sales tax as a sole primary funding source. As this is based on human nature, and can shift with the seasons or trends, it is difficult to anticipate this down to the dollar.
Carr said she based her numbers on the past months of 2017, while basing the remaining three months finding on 2016 totals.
“As Van Alstyne grows, these numbers will increase, and they have in the past,” she said.
Following the discussion on the EDC budget, the council turned its attention to the VACDC, which oversees many small community projects, assists in park planning and projects and fosters the city’s small business community.
Similar to the EDC, the CDC budgeted for a nearly $64,000 budget deficit, however Board Vice President Chris Dorak said this number could be misleading. Dorak said this number represents projects that were allocated funding in 2017 that will not be paid until 2018. As such they would show up in the 2018 budget as expenses, while their funding would still be secured from the 2017 budget.
Crowell questioned the inclusion of this as a 2018 expense as it was included in the 2017 budget. If the project would be funded using 2017 funds, it would not be included in the 2018 budget.
Both Dorak and Jaska argued that 2018’s expenses and revenues start at zero. While the funding was from 2017, the expense itself will take place in 2018. Any funding that took place in 2017 would also not be reflected in 2018’s revenues. Jaska also argued that to eliminate the cost from the 2018 budget would not accurately reflect what happened.
Crowell also raised concerns about how the CDC’s funds are spent. She noted that many of the projects under the CDC relate to city projects in which the EDC is partnering. This included planning projects, a shared bike plan and park projects.
CDC Director Rodney Williams said the organization’s role sometimes includes assisting the city in financing community projects. Ultimately, however, the CDC decides which projects it wants to pursue.
Crowell expressed frustration at the appearance that the city was the one deciding the projects that the CDC would pursue. Additionally, she said the CDC should focus more of its energy into small businesses. Crowell said the only real business-related project in the CDC budget involved a facade grant program for buildings.
“That does nothing for business, that doesn’t fill buildings,” she said.
Williams said the CDC is limited in what incentives it can offer for small businesses, as it is unable to offer taxing incentives. He added that the organization primarily focuses on advertising and marketing the city as a place to do business.
“So, you have about $23,000 to sell a whole heck of a lot of space,” Crowell said.
After more than a half-hour of discussions on the CDC budget, Mayor Larry Cooper said the discussion was beginning to turn circular and called for a motion on the item. An initial motion to approve the budget failed due to not receiving a second.
Crowell asked if it would be possible to table the request until a future meeting, but this idea was rejected by Thomas, who said that the council had tables enough items already.
In response, Crowell ultimately served as the second to the initial motion, citing a desire to move forward to other discussions. This ultimately resulted in a call by Carr to reconsider the EDC budget that was tabled earlier in the meeting. Calls from the crowd in attendance maintained that the board should approve both budgets together.
Crowell denied this request to reconsider.
“We already threw yours (the EDC budget) under the bus,” Crowell said in response.