Burnet council mulling over EDC transition

By CHRIS PORTER • Daily Tribune Staff

BURNET - Voters next May could decide on a measure that would allow Burnet’s Economic Development Corp. to earmark sales tax funds to pay for new parks, sports facilities, affordable housing and retail developments.

City Council members this week gave the go-ahead for city staff to move forward with an election that would switch the EDC from a 4-A corporation to a 4-B.

If the election is successful, officials say the old 4-A corporation would be dissolved and replaced by the new 4-B corporation.

The EDC, which was formed in 1993, collects a half-cent sales tax, which it uses to fund economic incentives for manufacturing and industrial employers. That amount comes out of the 2-percent Burnet sales tax. A further 6.25-percent sales tax is levied by the state.

“This (the switch to 4-B) would not increase that sales tax,” Economic Development Director Crista Bromley said. “It just broadens the type of projects we can use the money for. Almost every city starts out with a 4-B these days.”

A 4-B corporation can use sales-tax collections to fund parks, sports and entertainment complexes, water-supply facilities, tourism and incentives for retailers.

Marble Falls voters approved the 4-B switch in the city’s EDC earlier this year, and Bromley said Burnet leaders had originally hoped to make the switch at about the same time.

“We would have done it last year, but we still had some debt that the EDC owed,” she said.

State law mandates that a city government must assume any debt remaining from a 4-A corporation when it is dissolved to make way for the 4-B.

Bromley said nearly all of the Burnet EDC’s debt will be paid by the end of 2007, allowing the 4-B to start with a clean slate if it’s approved by voters.

What’s more, Bromley said those voters will hold a greater stake in the new corporation.

“It’s much more stringent,” she said. “You have to have seven members on the board, and the board has to publish its projects before they begin and allow 60 days for citizen response. It actually gives the citizens more oversight with a 4-B.”

If the election is successful, the new corporation would be formed about three months after the May vote. Any money possessed by the 4-A would be transferred to the new corporation, Bromley said.

“This won’t change the way money is collected or disbursed,” she said. “It just makes it more broad in regards to projects.”

For more information on the proposed 4-B switch, log on to www.cityofburnet.com/documents/FAQs.pdf.

chris@thepicayune.com

Back to main page

Burnet council mulling over EDC transition