Amarillo City Hall/Photo by Noah Dawson
Amarillo City Council held a special meeting to approve the budget for the Amarillo Economic Development Corporation on Monday, though the approval came with some significant restrictions in the wake of the RANGE controversy.
The AEDC has come under renewed scrutiny in recent months after it was found that the organization had paid $750,000 to the RANGE Foundation, despite the fact that only $100,000 had been budgeted for the expense. Mayor Cole Stanley called the transaction “unlawful” but “not illegal” during a press conference, noting that state law requires City Council to approve expenses made by the AEDC.
Amarillo City Council launched an audit of the AEDC’s financials and delayed approving the AEDC’s budget, which had originally been slated for approval earlier this month.
The AEDC responded first by releasing a memo defending the transaction, noting that the AEDC had remained within its overall budget by utilizing savings in their marketing budget to pay for the RANGE Foundation expense.
More recently, the AEDC modified its policies to require that any non-budgeted expenses over $50,000 or any budgeted expenses more than $50,000 over the budgeted amount be approved by both the AEDC Board and Amarillo City Council.
City Manager Grayson Path recommended that the council approve a constrained version of the AEDC budget. Under the constraints recommended by Path, the AEDC could continue paying existing contractual obligations, operating expenses, TPRDC expenses, and business development expenses. Within the business development expenses, he further recommended going over budget within any of the business development categories would need approval from City Council, while any sub-category would need City Council approval to go more than 25% over budget.
George Hyde, an attorney retained by Amarillo City Council, advised that the council be even more cautious in its approach. While the AEDC has historically operated with the understanding that the City Council had met its obligation to approve expenditures by the AEDC by passing the AEDC budget, Hyde argued that there was a distinction between approving a budget and approving an expenditure. Hyde recommended that the Articles of Incorporation for the AEDC be modified to put stricter policies in place regarding the approval of expenses. Amarillo City Council gave guidance to Hyde to begin the rewrite.
In the meantime, he recommended that an even more constrained version of the budget be approved, with the amended budget also clearly expressing approval of certain forms of expenses.
In the end, Councilman Don Tipps made a motion to approve the budget “amended to only include expenditures necessary for salaries, contractual obligations, and operating expenses.” The motion was seconded by Councilman Tom Scherlen and passed with a 4 to 0 vote.
Councilman Les Simpson was absent from the meeting. His absence in particular was notable, given the fact that Simpson had been the most vocal defender of the AEDC on the council.
“Are there not more serious problems we have to be spending council time and staff on than this?” asked Simpson during last week’s City Council meeting. “I mean, all the challenges we face, water and sewer lines older than any of us, wastewater treatment plants, does the EDC even rant on the first page of that list of problems that we’re facing?”
During the discussion of the AEDC budget, the council also received guidance from Hyde that the policy modifications made by the AEDC were moot and that the AEDC’s practice of awarding bonuses to employees was not lawful.
Mayor Stanley further noted that a preliminary version of the audit should be completed by Friday and that the results will be released to the public, with Stanley expressing hope that the version released would not need redactions.