Brownwood city council members approved a dissolution plan for the Brownwood Economic Development Corporation on Tuesday that obliges it to satisfy nearly $2.5 million in debt before transitioning into a municipal development district.
Texas state law requires that BEDC wind down its affairs and continue operations only after paying off the principal and interest of its owed bonds and meet financial obligations incurred before last month’s election. The BEDC owes approximately $2,467,237.87, according to a fairly detailed packet provided to the media at the morning council meeting, and outlines which entities are owed and when they must be paid.
The following is a list of bonds, debts and project financial obligations of the BEDC:
In agreement with the City of Brownwood, the BEDC has agreed to pay 34.78 percent (roughly $151,223) of the City’s 2003 Certificate of Obligation ($434,800) for improvements to city streets, including Marketplace Boulevard. A balance of $1,151,014.87 is owed to Citizens National Bank. That amount stems from a loan used to pay for construction of public parks, park facilities and open space improvements. Project financial obligations total to $1,105,000, which include projects to local entities like 3M, Ranger College and Wright Asphalt, among others. A total of $60,000 for staff salaries, expenses and benefits, and future miscellaneous project costs. The BEDC would use its cash on hand — listed in the packet at $4,112,512.98 — to fulfill these costs and be paid no later than June 30.
The timeline is expected to go something like this: once all debts are paid off and the reserve/escrow accounts are funded, the BEDC would then transfer all remaining assets to the city. After that, the city may transfer funds and assets to the MDD for use in economic development endeavors.
By the end of this month, the city would certify to the Texas Comptroller that all bonds, debts and financial obligations of the BEDC have been paid and/or reserve/escrow accounts have been funded. The certification would trigger the end to the BEDC’s receipt of tax funds. Beginning Oct 1, the MDD would start earing sales tax allocations and receive its first payment for October allocations on Dec. 9.