Sales Tax Corp requests internal audit of VEDC
2013 Proposed budget
• $418,700 - Staffing
• $60,500 - General operations
• $70,800 - Prospect development
• $384,000 - Sales Tax Development Corp.
• $124,800 - Private investment
• $20,000 - Victoria County
• $20,000 - Navigation District
• $1,200 - Interest income
Victoria Economic Development Corp. will have to open its books to the city's sales tax board after weeks of controversy surrounding an audit request.
After Dale Zuck, a Victoria resident, brought the issue up three weeks ago, members of Victoria Sales Tax Corp. agreed Tuesday during a regular meeting to request an internal financial review of VEDC.
While VEDC is funded through private donations, sales tax dollars account for almost 70 percent of its $550,000 budget.
Zuck said taxpayers deserve to know how the money is spent. He said he wants transparency.
Victoria City Council members approved allocating $384,000 in sales taxes to VEDC during the Oct. 15 meeting.
Although Zuck said he does not have a concern with any specific portion of VEDC's eight-line budget, he said he wants to make sure "everything really is the way it should look."
"It's my personal thought that business and government shouldn't be partnering up," Zuck said. "When you have partnerships between business and government, you can skew the law."
Victoria Economic Development Corp. President Dale Fowler said he does not view the request as an issue of mistrust.
"It's a national concern that dollars are spent wisely," Fowler said.
He said VEDC is one of the few city-contracted organizations that bring in revenue and a return on investment. Fowler, who joined VEDC in 2000, said to his knowledge the organization has not undergone a public city audit.
In 2011, VEDC brought in $2.75 million in ad valorem taxes, $274,602 of which went to the city. In 2012, VEDC brought in $3.79 million in ad valorem taxes, $330,370 of which went to the city. Ad valorem taxes are imposed on real and tangible personal property of businesses - such as computers and desks.
Fowler said those were conservative estimates and do not include sales tax revenues or other economic spin-offs.
Victoria's Finance Director Gilbert Reyna was tasked with the financial review.
He said the only financial records he has seen from VEDC are from October 2012 and the year 2011.
"I don't have an opinion," Reyna said. "I can do it in a month ... I'm here to please."
Reyna has a three-month deadline to complete the review of sales tax dollars.
VEDC's rent, payroll and personnel costs for its four employees exceeds the allocation, he said.
His goal is to "validate what the contract states," and see that sales tax dollars are kept in separate accounts from VEDC's private donor dollars, he said.
Councilman Joe Truman, who also serves on the Sales Tax Development Corp., said VEDC is a "great investment.
"I have complete confidence in the staff and I trust their evaluation," Truman said.