city of schertz pp
TRANSCRIPT
CITY OF SCHERTZECONOMIC DEVELOPMENT CORPORATION
Board Member Orientation
Welcome to the EDCWe will be covering the following topics •Board Membership Requirements
•Attendance at meetings
•Introduction to Texas Type B corporations
•Strategic Planning for the EDC
•Financial Statements
•Conflicts of Interest
•Working with the EDC Staff
•Community Involvement
•Helping Plan the Future of the Board
Prerequisites for the EDC Board Member Resident of the City of Schertz (required
by the Type B rules of Texas) Complete the Open Meetings Act course
( online http://www.oag.state.tx.us/open/og_training.shtml)
Completion of appointment document for the City of Schertz, and swearing into office
Interest in the Mission and Growth of the City
Attendance at Meetings
The President of the Board schedules meetings for the EDC•Meetings can be held monthly
•The calendar for meetings is found at www.schertz.com
•Meeting materials are sent out before the meeting and include the agenda, financial statements, other items for discussion
•Materials should be reviewed in detail before the meeting
•Board members should attend all meetings, unless excused
TEXAS Open Meetings Act
The State of Texas has adopted an Open Meetings Act
You must complete training in the course, but,
in generalBusiness may NOT be conducted
outside schedule meetings Activities involving EDC MUST be
open to the public (Executive Session excluded)
Economic Development Some definitionsAny activity designed to enhance the factors of productive capacity—land, labor, capital, and technology—of a national, state, regional or local economy. (US Department of Commerce)
The process by which new dollars are infused into a local economy by
primary employers
Primary EmployersThe companies whose products or services are ultimately used in
statewide, national, or international markets.
The best strategies are:Retain and expand established firms in the community (The EDC Office will develop a plan of visitation that will include you).
Create new business enterprise; support entrepreneurs
Improve community’s ability to retain and capture investment
Attract new “Basic or Primary” employers (Target Marketing)
Schertz Economic Development Corporation
This corporation is governed by the Development Corporation Act (1979)
A Board of Directors helps determine which projects to fund
The Schertz City Council retains approval authority over all expenditures
Type A and B Sales Tax Corporations
TEXAS has both Type A and Type B sales tax corporations. The City of Schertz is a Type B corporation, primarily due to the size of the City.
You MUST plan to attend the Sales Tax Training within the first year.
Some concepts:The City imposes a sales tax for economic development
A sales tax election was held to implement the tax
City Sales tax may not exceed 2 % (State = 6.25 %; local tax = 2 %)
Section A and B sales taxes are administered by a non profit corporation (Schertz Economic Development Corporation)
The Type B Corporation Board
The Type B corporation Board has: 7 members (A quorum is 4 members)
Appointed for two year termsCan be reappointed
Board members serve without compensation but must be reimbursed for actual expenses
The Type B Corporation Board, continued
Generally, the Board must con- duct at least one public hearing on proposed Type B projects (according to section a-1 of Section 4 B);
Must obtain City Council approval
After 60 days from public hearing, can make expenditures
Must submit an annual report to the State Comptroller
Permissible Type B ProjectsThe following MUST create/retain PRIMARY JOBS
Manufacturing/industrial facilities
Research/development facilities
Military facilities
Transportation facilities
Sewage/solid waste disposal facilities
Recycling facilities
Air/Water pollution facilities
Distribution centers
Small warehouse facilities
Permissible Type B Projects, con’t.• Primary job training facilities for use by institutions of higher
education
• Regional/National corporate headquarter facilities
• Projects which promote/develop new/expanded business enterprises, including projects for public safety, streets and roads, drainage and improvements, demolition, and general municipality improvements
• Job training classes
• Certain targeted infrastructure to promote/develop/expand business enterprises
• Land, buildings, equipment, facilities, improvements, and expenditures for a career center
• Professional/amateur sports, athletic facilities, entertainment, tourist , convention facilities, public parks and related open space improvements.
Permissible Type B Projects,con’t.
• Affordable housing
• Certain water supply facilities and water conservation programs
• Development/expansion/improvement/maintenance of rail, commuter, bus facilities
• Certain airport facilities
• Note that projects that create/retain primary jobs mean those jobs that fall within the NAICS sector codes (16) and meet the other 4 B tests.
Strategic Planning
Schertz Economic Development Corporation has developed a five part Strategic Plan. Details of the plan are available at the Office.
1. Diversify the Economic Base
2. Improve the Quality of Place
3. Grow, Retain & Attract Talent
4. Foster Entrepreneurship
5. Establish & Improve Image
There are action items for each goal.
Strategic PlanningAdditional information about the demographics of the City
are available at http://schertz.com/community-profile.html
The Economic Development Department conducted a “Business Attitudes and Perceptions Survey in January 2008. Board Members should familiarize themselves with the results of the survey.
A Board Retreat was conducted in January 2009. The results of that Retreat are available from the ED Department. In general, the Board determined to ‘focus on City identity’, and adopt a BRE attitude (Business Retention and Expansion)
Financial Statements
Fiscal Year - October – September
Reports (Monthly)
“Revenue and Expense Report”, which is similar to a Profit & Loss Report
Investment Report (page 3 of the Monthly Report)
Sales Tax Graph - compares Sales Tax Revenues from Prior Year Periods, by month (page 4)
Project Operating Cash – this portion of the Report shows money set aside for projects, and the ‘draw down’ from each one.
Revenue and Expense Report
AS OF: March 30, 2009
620-SED CORPORATION
FINANCIAL SUMMARY
REVENUE SUMMARY
Taxes
Fund Transfer
Miscellaneous
TOTAL REVENUES
This is a sample of the title page of the Revenue and Expense Report.
The date means the report was developed on this date, but reflects revenues, and at times expenses that are from several months prior to the date.
The left hand columns reflect all the sources of revenue of the EDC and the TOTAL REVENUES.
EXPENDITURE SUMMARY
GENERAL GOVERNMENT
NONDEPARTMENTAL
Supplies
Utility Service
Maintenance Services
Operating Equipment
ED Projects Support
TOTAL NONDEPARTMENTAL
Just below the TOTAL REVENUES line, is the Expenditure Summary.
The title “General Government” reflects the expenditures ‘outside’ the EDC Department (nondepartmental) and within the EDC Department listed as (Economic Development).
This page shows the NONDEPARTMENTAL expenditures. These expenses are the portion of all City expense shared by the Economic Development Department. The subtotal is listed as TOTAL NONDEPARTMENTAL.
ECONOMIC DEVELOPMENT
Personnel Services
Supplies
City Support Services
Utility Services
Operations Support
Staff Support
City Assistance
Professional Services
Fund Charges/Transfers
Maintenance Services
Debt Service
Operating Equipment
Capital Outlay
TOTAL ECONO DEVELOPMT
TOTAL EXPENDITURES
REVENUE OVER/(UNDER) EXPEND
Following the report on NONDEPARTMENTAL EXPENSES, is the report on the expenses of the ECONOMIC DEVELOPMENT department.
These are expenses incurred WITHIN the department. This is the area that should be especially reviewed by the EDC Board Member, since it reflects an area that can be controlled.
The third last line is the TOTAL ECONOMIC DEVELOPMENT department expenses.
Then we see the result of ALL expenses.
The final line shows how much the corporation is either over expenses compared with its revenues or under (), i.e. losing money, compared to revenues.
Current Current Prior Year Y-T-D Y-T-D Budget % ofBudget Period Expense Actual Encumbr Balance Budget
The report shows various column headers that help to understand how the corporation is performing compared with other time periods and expectations.
The first column is the BUDGET established by the Board of Directors.
The second column is the report of the revenues/expense during this month
The third column compares this period to the prior year.
The fourth column reports on ALL revenues/expense through THIS MONTH
The fifth column details what revenues or expenses are “ENCUMBERED” (committed) through THIS MONTH of the entire year.
The sixth column details how much of the budget we have ‘earned’ (revenues) or how much we have ‘spent’ (expenses).
The final column is the percentage of the budget we have earned or spent to date.
Other important parts of the Revenue and Expense report are:
The detail (page 2) of the Revenues from various sources (tax, investment earnings, fund transfers, etc.)
The detail of the money that the corporation has in various bank accounts (checking, investments) is on page 3.
A graph that shows the money received from the sales tax revenue by month. It compares the month graphically to prior year months.
The final part of the Revenue and Expense report details the Corporation’s PROJECTS OPERATING CASH. This is a detail of money that has been COMMITTED to projects, but is UNSPENT to date. Current or Former Board Members, with the approval of the City Council committed this amount of money to these specific projects. The last pages detail the expenditures for each of the projects, by month.
Conflicts of InterestThe Internal Revenue Service has provided definitions for Conflicts of Interest
PurposeThe purpose of the conflict of interest policy is to protect this tax-exempt organization’s interest when it iscontemplating entering into a transaction or arrangement that might benefit the private interest of an officer or director of the Organization or might result in a possible excess benefit transaction.
Definitions1. Interested PersonAny director, principal officer, or member of a committee with governing board delegated powers, who has a direct or indirect financial interest, as defined below, is an interested person.
Conflicts of Interest, con’t
2. Financial InterestA person has a financial interest if the person has, directly or indirectly, through business,
investment, or family:
a. An ownership or investment interest in any entity with which the Organization has a transaction or arrangement,
b. A compensation arrangement with the Organization or with any entity or individual with which the Organization has a
transaction or arrangement, or
c. A potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which the Organization is negotiating a transaction or arrangement.Compensation includes direct and indirect remuneration as well as gifts or favors that are not insubstantial.
THE BEST ACTION IS DISCLOSURE OF A POTENTIAL CONFLICT.
Conflicts of Interest, con’t1. Duty to DiscloseIn connection with any actual or possible conflict of
interest, an interested person must disclose the existence of the financial interest and be given the opportunity to disclose all material facts to the directors and members
2. Determining Whether a Conflict of Interest ExistsAfter disclosure of the financial interest and all material
facts, and after any discussion with the interested person, he/she shall leave the board meeting while the determination of a conflict of interest is discussed and voted upon.
3. Violations of the Conflicts of Interest PolicyThe Board determines if the member has failed to disclose
a conflict of interest, and shall take appropriate disciplinary action.
Corporate Policy on Confidentiality and Ethics As a Board Member of the Schertz Economic Development Corporation, you may from time to time learn non-public information about the Corporation or, in some cases, about other companies. It is the policy of the Corporation that such information may not be disclosed to any person for any purpose (other than authorized disclosures made within the scope of Board discussion and deliberation) and you may not use such information for your personal gain.
Working with the EDC Staff
There is an important balance that MUST be maintained by Board Members in relationship to the ED Departmental Staff.
Board Members “Govern” BY1. Establishing Budgets2. Adopting and Monitoring
Strategic Plans3. Reviewing Executive
Performance on a regular basis.4. Assuring compliance with 4 B
regulations5. Evaluating projects
Board Members MUST exercise care in remaining apart from Departmental Operations.
When advice is requested, Board Members should be ready to assist.
Summary of Board Activities
1. Establish Economic Development Corporation POLICY for Type B funds, in accordance with Texas State regulations
2. Review the results of Policy decisions at regular meetings by way of Financial Statements, City Reports and EDC Staff monthly reports
3. Provide consultation to the EDC President and EDC Staff, when requested
4. Be interested in the Community and EDC activities
Community Involvement
The Economic Development Department plans strategies that may include Board Members. These activities include:
1. Visiting Schertz Businesses on a regular basis
2. Attending openings of new businesses
3. Focusing on BRE (Business Retention and Expansion)
4. Act as an Ambassador in attempting to bring new businesses to the City.
Helping Plan the future of the Board
There are things that you can do that will assure continued success. These include: Adopting a culture that enables the organization to achieve positive consistent results and successful growth.
. Culture refers to values that are shared by the people in the Corporation
Corporate Culture can have a significant impact on long‑term financial performance
Education – commit to training
Board self-evaluation process designed to measure and improve the overall effectiveness of the Board
Welcome to the Board of Directors!
Any Board Member and the ED Department are always available to answer your questions.
Thanks for your Service!
