The Athens City Council approved a structure change to the Athens Economic Development Corporation structure on Monday, moving the office of Executive Director under the supervision of the city manager.
The move is a departure from the way the AEDC has been run since its inception nearly 30 years ago.
“It is not this council's intent to take over the AEDC,” Mayor Monte Montgomery said
The change will take place when the current contract ends or Executive Director Lisa Denton no longer holds the position.
Councilman Aaron Smith said communication between the city and AEDC is very important.
“Information has to be more readily available,” Smith said.
The council also discussed appointment of a new AEDC board member to replace one of the four current members who reside outside of the city limits.
Under the Texas local government code, the city council of a Type B EDC must appoint a board of seven directors, up to four of whom can be employees or officers of the city or city council members, to serve two-year terms.
Councilman Robert Gross made a motion that Ed McCain be appointed to replace Barrett on the board.
Smith said he would like to give the AEDC a chance to self govern and was willing to hold off on appointing a new member until Barrett resigned and the board was given a chance to submit the name of a new nominee.
City Attorney Blake Armstrong said if Barrett does not resign, it's a violation of the AEDC bylaws and the council will have to remove him.
According to the Texas Comptroller's website, boards of directors of both Type A and Type B EDCs serve at the pleasure of the city council and may be removed and replaced at any time and without cause. All funding agreements approved by an EDC must also be approved by the city council.
On Monday, during comments from the public, two representatives of HVAC manufacturing said they were not pleased that the council, at the May 23 meeting. did not address the company's request for assistance that had been approved by the AEDC board.
CEO John Karamanos said the request was for financing for additional manufacturing space.
“We were planning on adding an additional 125,000 square feet of advance manufacturing space to our existing site next year,” Karamanos said.
The help sought from AEDC was a “temporary Band Aid” to get through the next six to 12 months.
Athens would have benefited by visits from 20 to 100 white collar customers per week who came to their planned innovation center and 300 to 600 high paying jobs created over the next six years, Karamanos said.
“That's exactly what is needed to help the city of Athens and its constituents prosper and grow,” Karamanos said.
“The AEDC recognized this with unanimous approval of our project,” Karamanos said
Montgomery said on Tuesday, the AEDC package for HVAC is basically a $350,000 loan for a building at 4.6 percent interest.
“My feeling is at 4.6 percent, they need to go out to the banks and try to borrow the money,” Montgomery said. “Because now the city is competing against banks that depend on those loans to keep the doors open.”
Montgomery said he could not vote to approve the package because the banks should have the opportunity to profit on businesses the AEDC brings to town.
“Then if they can't work out a deal, they can come to the AEDC for assistance,” Montgomery said.
Another part of the package is $135,000 for equipment.
“The AEDC has a grant and they can spend money on equipment and its not a problem,” Montgomery said.
Another item of discussion on Monday, was a severance package in Denton's contract. At a previous meeting, the council declined to approve the contract, instead sending it back to the AEDC board for reworking.
The next meeting of the AEDC board is Thursday at 10 a.m.. The action regarding potential changes in structure, organization and activities of the AEDC is on the agenda, as well as the resignation of Cliff Barrett and election of a treasurer. The executive director's employment agreement is scheduled to be discussed in executive session.