Wednesday, September 25, 2013

Show Me The Money


 It has been said that our EDC needs to build up reserves  to offer cash as a way of attracting industry to town. That companies will point blank ask how much cash our EDC is willing to offer. If we don't have enough, we are out of serious consideration. 

Is that even a good way to conduct business? Do we really want a business that is just looking for a hand out?

A reason some do not want to go 4B is that all the money could be siphoned off for a quality of life project(s) and we would have no money to attract manufacturing or industrial business(es).  Sounds to me like some companies are asking our board to give them everything we have, which would in turn affect future projects. 

But wouldn't the same thinking that keeps our 4A board from draining all the money, be the same rational thinking that would keep a 4B board from doing the same thing?

We are trusting 5 people (the number of members required for a 4A EDC board) but won't trust a 7 member 4B Board (the number of members required for a 4B EDC board)? 

That line of thinking just doesn't add up to me. 

I believe having 7 people being good stewards over money is better than 5. Fourteen eyes looking over money, better than 10.  I guess I'm crazy.

Anyway back to building up reserves...

I'll play along with that thinking.  We need to have money in the bank to give a company a blank check apparently.  But answer me this, what towns are you generally competing against when you try to attract industry? I have looked at some nearby towns with 4A EDCs to see how we stack up.

Fiscal year 2012 budgets:
Sulphur Springs - Cash Reserves: $2.5 Million; Annual Sales Tax Revenue: $1.5 Million
Greenville - Cash Reserves: $1.5 Million; Annual Sales Tax Revenue: $500,000
Mt. Pleasant - Cash Reserves: $2.4 Million; Annual Sales Tax Revenue: $1.1 Million
Paris - Cash Reserves: $1.5 Million; Annual Sales Tax Revenue: $1.2 Million
Wylie - Cash Reserves: $1.3 Million; Annual Sales Tax Revenue: $1.6 Million
Rockwall - Cash Reserves: $18 Million; Annual Sales Tax Revenue: $4 Million
McKinney - Cash Reserves: $12 Million; Annual Sales Tax Revenue: $8.8Million

Commerce - Cash Reserves: $1.6 Million; Annual Sales Tax Revenue: $400,000

According to statements and posts, our EDC has been showing businesses the money and they have been choosing to go elsewhere.

Greenville, with similar reserves and revenues, announced in August that it was able to attract 2 businesses that will create over 300 jobs. (Fritz Industries and International Grains and Cereal LLC).

What no one can answer is how much money is needed.  Some say we must have more and yet we  see our neighbor to the west was able to attract 300 jobs with less.