The City of Brownwood held a successful election on May 7, 2016 which terminated the Brownwood Economic Development Corporation (BEDC) and creates the Brownwood Municipal Development District (BMDD). At a recent city council meeting, a resolution was adopted to approve the dissolution plan for the BEDC.
State law requires that the BEDC wind down its affairs and continue operations only as necessary to pay the principal and interest on the BEDC’s bonds and to meet financial obligations incurred before the date of the election, and to dispose of the BEDC’s assets and apply the proceeds to satisfy the BEDC’s bonds and obligations. Both the City Council and the BEDC Board are required to approve the plan of dissolution for the BEDC. The BEDC Board will meet on June 21st to consider the plan.
The Dissolution Plan provides for paying of all debts of the BEDC and establishment of reserve/escrow accounts, which will be administered by the City and/or the MDD, to pay for all financial obligations of the BEDC, including ongoing projects. After all debts are paid and the reserve/escrow accounts are funded satisfying all financial obligations of the BEDC, the BEDC will transfer all remaining assets to the City. The City may then, through a Chapter 380 economic development agreement, transfer funds and assets to the MDD for use in economic development endeavors.
By the end of June, the City will 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 to pay for the financial obligations of the BEDC. This certification will trigger the end to the BEDC’s receipt of tax funds.
Beginning October 1, 2016, the MDD will start earning sales tax allocations and will receive its first payment for October allocations on December 9, 2016.
Executive Director of the BEDC/BMDD Guy Andrews explained that after the dissolution, the BMDD will begin operation with $1.7 million dollars in operating funds and will have a significant loan with Citizens National Bank paid off, which will put the BMDD in better position to begin their operations.
“This is going to be great for the City of Brownwood, with the MDD, we will have more opportunities for development in the city and be able to provide a better quality of life for the citizens of Brownwood,” said Andrews.
