Hutto councilmembers release statements regarding investigation of former EDC

At Hutto City Council Thursday night, councilmembers Nate Killough and Tom Hines both read prepared statements regarding their decisions to vote for a formal audit investigation into alleged improper use of taxpayer funds by the former Hutto Economic Development Corporation (EDC).

Both statements can be read below. Councilmember Hines' statement has been abridged and all emphasis is his own.

Councilmember Killough's statement on the investigation of the former EDC:

"Months ago, the Council saw a huge hole in the way our EDC was operating. We were changing the focus from simply trying to bring in more jobs to bringing in retail and spec space, and helping small local business get off the ground. During this period, we became aware of some very questionable expenditures, but we went ahead and directed the city manager to work with the EDC CEO and board to get some deals closed so we could start working on that change in direction.

We directed the EDC to stop spending money on the Megasite. Instead, we wanted them to focus on finding businesses to fill what we knew was a sure deal in the Titan project, Innovation Business Park. Two weeks later, the CEO was back, asking for money to take a private helicopter tour of the Megasite. It was infuriating.

When we voted to appoint a new board, one that is willing to work with the City Council, as opposed to going off in whatever direction they wanted we were met with staunch criticism from former board members and their supporters.

The undeniable conclusion is that the former Board cost the city and the taxpayers more time and money, and taxpayers have the right to know how their money is being spent. With everything that has come to light, I see no other choice but to direct this Council direct the police chief to open a formal investigation into the operations of the Hutto Economic Development Corporation. The whole goal is to move Hutto forward and until we deal with these issues and put them to bed, we’ll never be able to do that. We owe it to the taxpayers to find out how their money has been spent."

Councilmember Hines' statement on the investigation of the former EDC:

"Changing the entirety of the board was necessary for a couple of reasons – in my personal opinion. The most important being that they – as a corporation – despite being otherwise directed b the City, refused to move in the direction advised by the City Council. Not once, but repeatedly. This threw up a few red flags. Next, the former EDC Board was reluctant to let the City finance officer look at their financials. That is when we, the Council, asked the City Manager to look at the EDC and give us his opinion about the productivity and return on investment we could expect to see in its then, current state. In my opinion, the correct action was taken by making sure the problems with the past board were not passed on to the new Board. The former board spent hundreds of thousands of dollars courting possible prospective clients on golf courses, expensive dinners, NFL games, and Formula One races, and landing NOTHING. The reason was always that they had nothing to offer them. If that was the case, then why was the money not spent on infrastructure to support business first?

While these expenses were not ILLEGAL, per se, I do feel the expenditures were NOT in the best interest of the citizens nor were a proper use of public funds. What scares me the most is that we may have only seen the tip of the iceberg – it’s a slippery slope from improper use of funds to illegal activity.

My biggest concern with the past EDC board and former Director of the EDC is this: The Hutto EDC for years has been investing taxpayers money in a piece of property known as the Megasite. The Megasite has access to rail service, which makes this property very attractive for possible manufacturing in the area. Over the years, thousands and thousands of taxpayer dollars have been spent on marketing and engineering, along with payments to the land owners for the rights or options, to buy the property when a deal is made. Earlier this year, the past EDC decided to sell those rights to a brokerage firm for $10. They were told not to do so by members of this Council and the City Manager. But, for $10, someone else now has the first rights to sell the Megasite property to anyone they choose, potentially losing everything you, as a taxpayer, had invested in. We have a potential deal on the site now and must retain those rights. Members of Council, City staff and current EDC board members and attorneys recently met in mediation with the brokerage firm to resolve this and regain those rights. In the end, that $10 has already cost the taxpayers $275,000, and by the time it’s done will have cost us an approximate total of $450,000. Why would the EDC, who is charged to work for the taxpayer, suddenly make a deal to essentially block the City from any say in who or what ends up on this land? The last question I have about this deal, and sadly one that will probably never be answered, is who are the beneficiaries of the blind trust that were attached to this particular deal? Certainly, not the taxpayers.

In closing, we, each as Council members, were elected to represent the Citizens of Hutto. I call on you to consider: 1. The results our City Manager and his staff have already achieved in less than a year; 2. Think twice about the reputational and opportunity risk we incur by not working through issues personally, face-to-face; 3. Consider the way our City staff have identified solutions for the water issues they inherited, taking control of our future; and 4. Watch the results the new EDC achieves working according to Council directives and in concert with the City leadership. You elected us… now please entrust to take Hutto into a brighter future where managed population growth and economic diversity can reduce individual taxes and make Hutto stronger."
By Iain Oldman
Iain Oldman joined Community Impact Newspaper in 2017 after spending two years in Pittsburgh, Pa., where he covered Pittsburgh City Council. His byline has appeared in PublicSource, WESA-FM and Scranton-Times Tribune. Iain worked as the reporter for Community Impact Newspaper's flagship Round Rock/Pflugerville/Hutto edition and is now working as the editor for the Northwest Austin edition.


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