JEDCO, city approve cutback
Proposition would cut funds in half for economic development
By JIMMY GALVAN Managing Editor

The Jasper Economic Development Corporation board believes better streets will aid economic development in Jasper.

The JEDCO board approved a ballot proposition designed to reduce JEDCO sales tax revenues by one half and adopt a street maintenance and repair tax. The proposition, which will be placed on the city's May ballot, will cut JEDCO's sales tax revenues to 1/4 of one percent and create a street and repair tax of 1/4 of one percent.

"It will reduce economic development revenue funding by one half so it cut our revenue in half," said JEDCO interim director Kari Ellis of the board's decision.

Jasper City Council agreed with the proposition as well as they approved the measure during their Monday, Jan. 14 meeting. The measure passed 4-1 with Councilman Randy Sayers being the only "nay" vote.

Sayers had requested that the issue be tabled until more information could be secured from the bond attorneys. Sayers said he had a conversation with JEDCO attorney Gary Coker Monday, Jan. 14, who believed the issue should be tabled.

But councilwoman Diane Pace made the motion with council reserving the right to change the wording during the February meeting.

JEDCO board member and Jasper Mayor David Barber placed the item on the agenda and based it on a similar plan put in place by the Nederland Economic Development group.

"They have changed the law so that the city's voters can put in place a tax, which can be used for street or water improvements," Barber said. "I had the city staff working on this issue to see how we could go about working this out.

"The way I look at it, if we get the streets looking better and in better shape that will help economic development," Barber said. "People come into town, thinking about moving their business here and they get their teeth jarred just driving down our streets. It doesn't make a good impression."

Barber said the city had passed numerous bond issues in the past and "we're pretty much bonded up right now."

"To pass a bond you have to have more sources of revenues and with this option we can pay as we go," Barber said.

The decision, if passed by city voters in May, would essentially cut JEDCO's funding in half. Barber said he doesn't believe the proposition, if passed, will have any adverse effect on economic development in the city.

"(City staff) made out a 10-year plan for JEDCO and in that plan we have JEDCO meeting all its obligations and still have some money to work with," Barber said.

One of the major sticking points to the proposition is the fact that the bonds passed for JEDCO revolving around the ? of one percent sales tax revenue, which was passed by voters.

Voters now would approve to lower JEDCO's amount and create the new street maintenance and repair tax with the same fees.

Barber said the wording on the proposition would be done so that if JEDCO would needs the funds back, they could be switched back by the city.

"We called the council that holds the bonds for JEDCO and they really didn't have a problem with it," Barber said. "(The attorneys) wanted it worded so that if something catastrophic happens and sales tax revenues start dropping considerably, then JEDCO would have first right to that money before the city would."

But in a letter dated Jan. 8 from Coker to JEDCO interim director Kari Ellis, Coker stated "it appears that the tax rate cannot be reduced as long as a bond remains outstanding."

Coker based this decision on a Texas Attorney General opinion dated July 8, 1992, which states "a reduction in the sales tax rate may not be applied to any bonds issued prior to the date of a roll back election."

"The JEDCO bonds were certainly issued prior to the proposed election," Coker stated in the letter. "I would advise that Jasper Economic Development Corporation not recommend reduction of its tax rate as long as its existing bond obligations remained unpaid. It appears that to do so would constitute a breach of contract that Jasper Economic Development Corporation has with its bondholders."

Barber said the proposition would be worded so that JEDCO could still retain the money if needed.

Coker is planning to revise the proposition so that the wording is clearer for the voters.

"Both sides agree there is no problem with this except they want to make sure it is worded correctly," Barber said. "But the voters will get the final say on if this is done or not."