Updated: If Brownsville voters say yes, GBIC and BCIC will be dissolved in favor of a municipal development district

Rio Grande Guardian
BY MARIO MUÑOZ AND STEVE TAYLOR 
JANUARY 17, 2024

BROWNSVILLE, Texas – Brownsville City Commission wants to terminate its two economic development organizations –  Greater Brownsville Incentives Corporation and Brownsville Community Improvement Corporation – and replace them with a municipal development district.

The new entity would be called the Greater Brownsville Municipal Development District. 

Whether this happens will depend on voters living within the Brownsville city limits and Brownsville’s extraterritorial jurisdiction (ETJ). The vote on whether to set up the new special purpose district and dissolve GBIC and BCIC will take place in May. 

Will Treviño, Brownsville’s city attorney, explained what a municipal development district (MDD) is an why it is being proposed during a public hearing held at city hall on Jan. 16. He said that by including the ETJ, the City of Brownsville could pull in more sales and use taxes for the new special purpose district.

“Based on the Texas Comptroller, in the ETJ there is approximately $400,000 apparently that is being left on the table that’s not being collected by the city. And so this is additional revenue the city believes would help on projects both within the city and ETJ,” Treviño said.

Treviño pointed out that Brownsville’s ETJ is growing.

“Because of changes in state law… annexation have become very difficult. And so this is a way for the city to be able to fund projects within the city and the ETJ, especially with activities such as SpaceX, the Port, the proposed 2nd Access Point for South Padre Island. All this will start increasing the sales tax in that particular area, the ETJ. So it’s a good time right now for the city to go ahead and start collecting that.”

Treviño continued: “This will be replacing GBIC and BCIC with a single organization that would be able to coordinate and streamline the economic development projects and quality of life projects within the MDD.”

Treviño started his remark by explaining what an MDD is.

“So it is a special purpose district whose purpose is to generate economic development and growth opportunities and this includes quality of life projects. They use sales and use taxes. That is the sales tax that you collect when you make a purchase and it funds economic development and quality of life projects.”

Treviño then explained how an MDD is different from GBIC and BCIC.

“It is different from an economic development corporation. GBIC and BCIC are examples of what an economic development corporation is. It’s different in that it is a true political subdivision of the state and the city. GBIC and BCIC are both nonprofits that are created by cities under the Development Corporation Act. And so as nonprofits they have to follow the rules that a nonprofit has.”

Treviño said that being a political subdivision, a municipal development district is subject to all laws that the city is subject to, such as the public information act, the open meetings act. He said they are also subject to the competitive bidding statutes. 

And, because an MDD is a political subdivision, it has more governmental immunity GBIC and BCIC enjoy.

Governance

Treviño said the Greater Brownsville Municipal Development District (GBMDD) would be governed by seven directors. These directors would serve staggered two-year terms. The directors may be removed at any time with or without cause. Qualifications include that they must reside in the MDD area boundaries. 

“And just for clarification, the MDD boundaries proposed are within the city and the city’s ETJ,”  Treviño said.

Treviño said said the city commission would annually review the GBMDD’s financial statements and they would have records to the special purpose district’s books at all times. 

Quality of Life

Treviño said an “additional feature” that the City Commission would include, if voters approve the special purpose district, is an ordinance that creates a restricted fund so that as sales and use taxes get funneled into the MDD, at least 50 percent would be earmarked for quality of life projects, such as parks and sports.

To dip into that 50 percent for an economic development project, both the MDD board of directors and the city commission would have a two thirds majority in support of such a move. 

Not a new tax

Treviño said it was important to note that there will be no new taxes. Those who purchase something in the ETJ that has a sales tax attached to it will pay a sales tax and a portion of this tax will go to the MDD.

“It’s not a new tax. It’s not a property tax. It is a tax that, when you go to a store like HEB or Walmart, you purchase something, you pay 8.25 percent sales tax. Two percent of that is picked up by the city. And so this is a tax that’s already collected.”

Brownsville City Manager Helen Ramirez interjected once during Treviño’s remarks about an MDD.

“This (MDD) is not a City of Brownsville department. It would be its own separate entity and I think that should be clear,” Ramirez said.

Treviño responded: “Yes, it is a political subdivision. So it is a separate entity from the city.”

Treviño then showed two maps showing where the Brownsville’s city limits are and where the ETJ boundaries are.

At the conclusion of Treviño’s presentation, Brownsville Mayor Cowen asked if any member of the public wished to speak about the proposed MDD. No one did.

Editor’s Note: Here is an audio recording of Brownsville City Attorney Will Treviño’s presentation:

Editor’s Note: The above story has been amended from the original posting to explain that those who purchase something in the ETJ that has a sales tax attached to it will pay a sales tax and a portion of this tax will go to the MDD. Thank you to Bret Gardella of GBIC for pointing this out.