On the Glen Rose 4b BoardSomervell County Salon-Glen Rose, Rainbow, Nemo, Glass....Texas


 

On the Glen Rose 4b Board
 


10 June 2010 at 3:47:35 PM
salon

Just had a conversation with Darrell Best about the 4b board. I had heard good things about the book he put together for 4b members and had some questions about how it operates. While this is fresh on my mind going to write it down with a little diagram.  The initial reason I was asking him about how the 4b got money or what it's control is, etc, is because of an entry I saw on the info Peggy Busch gave me earlier today about the Certificate of Obligation bond that was financed with Southwest Securities for the Riverwalk and Oakdale. The city gave money to the 4b to repay them for the Riverwalk and I wanted to understand the process. So here is my understanding. IF I HAVE ANY PART OF THIS WRONG, feel free to jump in and add a comment.

4b created a non-profit corporation registered with the State of Texas-Glen Rose Economic Development Corporation. Here's what the SOS website has for them as of today.

(incidentally, the GREDC is going to meet on July 13, 2010 at 5:30 to appoint the new board).

When state tax is collected on taxable items in the city of Glen Rose, the state tax also has, if an entity has passed 4b, the 4b tax with it. So the state tax might be 7.5 percent, for example, with another 1 percent for 4b-you only see the 8.5 percent (or whatever it is) on your receipt, you don't see the breakdown). The state sends back the 4b to the entity (in this case City of Glen Rose) and the city is to immediately (within a reasonable amount of time) transfer that money to 4b. So, the GREDC, as a corporate entity that has a board, etc, has also its own bank account for the funds.

When the 4b first decided to go with the Riverwalk as their project, they gave the money to the city. Since the city was pursuing getting CO (certificate of obligation bond) for the monies (which turned out to be about 3 thousand), when the CO came through, the city paid back the monies that had initially been put up, by the 4b for the Riverwalk)  TO the 4b. The 4b on a monthly basis pays out FOR the CO bonds TO the city. The city, however, is the entity that is financially responsible for the bond, rather than 4b. If, for example, the 4b funds failed for some reason and the 4b corporation, as an entty went bankrupt, the city would be fully responsible to pay back the bond money. Again, the city receives the bond payments FROM the 4b board which receives the 4b tax money from the state which receives the tax money from anyone who shops in Glen Rose and buys taxable items.

 


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Comments!  
1 - Anom   11 Jun 2010 @ 6:18:26 PM 

Good Synopsis Salon.  The point is the 4B (actually Glen Rose Economic Development Corporation), is a corporation formed under the laws of the State of Texas which has the fundicary responsibilty of the management of the tax revenues produced by the "TypeB" tax (1/2%).  The Board solely determines which projects it deems appropriate, but can only expend the tax revenues with the City Council's approval, thereby achieving the checks and balances in the system.



2 - salon   11 Jun 2010 @ 8:19:03 PM 

@anonymous-here's a related question from your comment. What happens in the case where the city wants to alter the terms of the Co they took out and add another 1 million dollars to it? Since the 4b board is the one paying out to the city for their project, doesn't the 4-b have a say so in whether this can be done? In other words, 4b can only expend tax revenues, as you said, with city approval. But can the city expend 4-b taxes (by adding another million) without 4b approval?


Latest Blog Post by salon -Louis Vuitton Artistic Director Calls Trump a Total Joke (Keene, Texas)
3 - Anom   14 Jun 2010 @ 2:47:39 PM 

No the City would have to come back to the GREDC, establish a new "Project" and receive approval to change the terms or conditions of the agreement between the GREDC and City.



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