DEPARTMENT: Economic Development
DEPARTMENT HEAD: Rene Dominguez
COUNCIL DISTRICTS IMPACTED: Citywide
SUBJECT: FY 2015 Budget for the San Antonio Economic Development Corporation (SAEDC).
SUMMARY:
This is an Ordinance approving: (1) the SAEDC FY 2015 Budget of $959,020 (SAEDC Budget), as required by the Bylaws of the SAEDC; and (2) a Second Amendment to the Economic Development Grant Agreement between the City and SAEDC (Second Amendment) incorporating $300,000 to the SAEDC Budget, which was appropriated and approved in the City's FY 2015 Budget. The SAEDC Board approved the SAEDC Budget and Second Amendment on September 26, 2014, for consideration by City Council.
BACKGROUND INFORMATION:
City Council approved the creation of the SAEDC on May 13, 2010, as a nonprofit corporation established for the purpose of helping promote economic development projects in targeted industries and areas of the City. SAEDC is governed by a seven-member board of directors (Board) which consists of the Mayor, City Manager, Chair of the Economic and Community Development Committee (Councilman Ray Lopez), Chair of the Infrastructure and Growth Committee (Councilman Rey Saldana) and three citizens at-large (Mike Dwyer, Juan Landa and Marianne Watson).
The City may invest funds through SAEDC in certain economic development projects and potentially achieve a return on investment from the SAEDC's equity position in a project. Since May 2010, City Council and the SAEDC Board have approved investing in four projects to include: (1) InCube Labs; (2) the South Texas Research Facility at the UT Health Science Center at San Antonio; (3) Innovative Trauma Care, Inc.; and (4) StemBioSys, Inc.
ISSUE:
The SAEDC Bylaws require approval of the SAEDC Budget by City Council. The SAEDC Budget includes an FY 2015 appropriation of $300,000 from the City's General Fund and $500,000 from the City's Economic Development Incentive Fund approved by City Council in FY 2014 for potential future projects. Cash expenditures in the SAEDC Budget include potential future projects, SAEDC operating expenses, such as the Executive Director's salary, outside legal counsel, an annual audit, insurance and previously approved contractual rent obligations. Future projects occurring in FY 2015 will require approval by the SAEDC Board and City Council pursuant to the Bylaws of the SAEDC. The SAEDC Budget will be adjusted if additional funding is needed and appropriated for any FY 2015 projects.
The City's FY 2015 Budget includes an appropriation of $300,000 for the SAEDC Budget, which requires the Second Amendment to authorize the appropriation under the Economic Development Grant Agreement between the City and SAEDC. The SAEDC Board approved the SAEDC Budget and the Second Amendment on September 26, 2014, for consideration by City Council.
The SAEDC Bylaws require SAEDC to complete an annual audit and report those findings to City Council. Local accounting firm Leal & Carter completed the FY 2013 audit for the SAEDC with no management findings (attached).
ALTERNATIVES:
City Council could choose to not approve the SAEDC Budget or Second Amendment, or request that SAEDC submit a revised budget. Electing to not approve the SAEDC Budget or the Second Amendment, or requesting a revised SAEDC Budget, would result in SAEDC being unable to continue operations, meet contractual obligations previously approved by City Council, and access funds previously appropriated by City Council.
FISCAL IMPACT:
The fiscal impact of the SAEDC Budget and Second Amendment to the City is $300,000 from the City's General Fund.
RECOMMENDATION:
Staff recommends approval of the SAEDC Budget and Second Amendment.