GBIC BYLAWS CHANGE COULD BE BEDC'S DEATH KNELL

By Juan Montoya
A change in the bylaws of the Greater Brownsville Incentives Corporation's bylaws establishing a committee to vet potential economic development projects the 4A organization could fund could spell the end of its relationship with the Brownsville Economic development Corporation.

The GBIC, which was formed to oversee the disbursement of a ¼ cent sales tax collected in Brownsville and takes in nearly $5 million annually. The GBIC board, appointed by the Brownsville City Commission approves funding for job creation incentives and various grant programs related to infrastructure and education.

The GBIC board, Chairwoman Commissioner Jessica Tetreau-Kalifa, Commissioner Cesar de Leon, member John Cowen, and past chair David Betancourt (Cameron County Treasurer) have placed the proposed bylaws change to be considered and acted on by the city commission. Former commissioner Deborah Portillo resigned upon not seeking reelction and there is a vacancy on the board.

Under the proposed changes, the GBIC will appoint its own vetting committee to recommend (non-binding) approving companies or economic development projects it could fund.

The changes are:

There are some differences between the BEDC's makeup and the new proposed committee. For example, it will be composed of seven members, not 33, as is BEDC. Also, no member of the committee shall be currently serving on the GBIC board or be an elected official.

The seven members shall serve for two years unless removed (by a majority of the GBIC board), resign, or cease to qualify for membership.

The split from the BECD-GBIC structure was written on the wall ever since a study of its feasibility and efficiency was undertaken by a three-person panel made up of representatives from the UTRGV School of Business, the Brownsville Public Utilities Board, and the Texas Southmost College Workforce Development Office. The study found that neither of the entities had clearly defined their goals or objectives.

"Neither GBIC nor BEDC has undertaken a comprehensive yearly strategic planning effort for some time," the report states. "BECD has produced some 'planning documents' which appear to be sporadically done, and in large measure are repetitions of prior years' documents. There does not appear to be any external environmental assessment, internal assessment, or stakeholder input...measurable goals are not readily apparent."

"In such a vacuum, BEDC has apparently in large measure gone its own way," it concluded.
BEDC is the subcontractor for the GBIC to vet potential companies and to provide the support for the entity to foster economic development and create good-paying jobs.

Under a three-year contract with the GBIC, they get paid $1,672,400 each year, for a total of $5,017,200. That contract ends this September.
It is safe to say that that BEDC did not attract anywhere near that $5.07 million in new jobs or industry that it spent on its "operations."

To put it mildly, the BEDC's performance has been an abject failure and currently does not even have an executive director after Jason Hilts, the unqualified CEO which had been hired by the BEDC since 2002, suddenly resigned amid rumors of federal scrutiny of the organization's activities here and in Latin America, specifically Colombia.

The current state of affairs between GBIC and the BEDC can only be described as a "disconnect," with each entity going about its business with little communication on a number of crucial economic development parameters that directly impact on their stated missions to create good-paying jobs to the community that funds them.

To begin with, when the new board of the GBIC met for the first time, they asked GBIC attorney Mark Sossi for the contract between both entities. It took Sossi months before he could come up with the document to provide the new members. For this ethically-challenged lawyer, it's about par for the course.

Once they had the contract in hand, GBIC members discovered that under the agreement both signed, BEDC is obligated to provide GBIC:

1. With an annual audit which it had not done until they demanded it.
2. With BEDC's annual budget to GBIC for review, something the BEDC board and administration never did

3. BEDC was to keep GBIC appraised of its activities and operations to insure compliance with the goals and endeavors set forth in the contract, something else which BEDC has also failed to do.

4. A GBIC "performance committee" was to meet annually with the BEDC Executive Committee over the life of the three-year contract to review the goals, activities and performance of the BEDC as previously agreed upon and to set new goals, activities and performance criteria for the coming fiscal year. The BEDC also failed to observe that part of the contract and the annual meetings have never been held.

5. The BEDC and GBIC were to meet on a quarterly basis (every three months) to discuss activities and performance completed to date in relations to established goals. The quarterly meeting would give GBIC the ability to monitor goal achievements and modify goals when needed. That was also never done.

6. Additionally, during each of the quarterly meeting that never happened GBIC was to be shown the cumulative expenses and revenues for the preceding quarter together with all prior fiscal quarters of the contracted years to be reviewed collectively.

7. BEDC was to provide the GBIC the minutes from the BEDC board meetings. It never did.

8. BEDC was also under contractual obligation to provide GBIC with a certified audit of all its funds prepared annually by a certified public accountant within 90 days of the close of BEDC's fiscal year. This was also not done by the BEDC.

9. BEDC was to make available for inspection, at a reasonable time and place, at the request of the GBIC, any and all of BEDC's financial records. Not only has this contractual obligation been ignored by the BEDC Executive Board and administrators, but it has strongly resisted opening is financial to the GBIC.

The contract can be terminated prior to the term by mutual agreement of both parties, by either party for cause or without cause, for any reason and upon 120 days with written notice, or should either party default in conforming with or adhering to any requirement and the default is not corrected within 15 days.

In the event of termination, BEDC shall be entitled to all compensation earned by it to the date of the termination computed pro rata through the date, but shall not be entitled to any further compensation under any circumstances.

Given the BEDC administration and its board's failure to meet its contractual obligations on its three-year $5,017,200 contract, as we said at the top of this post, the proposed GBIC bylaw changes may signal that the board feels it's time to move past it to achieve the true economic development this community so desperately needs.