Lago Vista EDC seeks tax-exempt status, $49,360 study unfunded

What the EDC is and why it matters now

The EDC is a nonprofit corporation created under state law.⁴ It does not receive sales tax money, and the City Council approves its spending. Its attorney said it is "at the mercy of what council can give you as part of a budget or what you're able to fund through grants."⁷ A 501(c)(3) is a federal tax designation, granted under Internal Revenue Service (IRS) rules.²

What we reported before

Our Oct. 1 story covered the EDC's $49,360 request for a development study.⁸ The Sept. 8 minutes, in the Oct. 13 packet, record who moved and seconded the motion that day on a planning firm's proposal (TBA Douglas). Board member Don Johndrow moved to put the proposal forward for council consideration "with the backing of the EDC." Chair Justin Loucks seconded, and the vote was unanimous.⁹

The request went to the council as a one-time "decision package," a request to add a one-time item to the city budget.⁸ The package said the EDC "does not presently have a dedicated sales-tax revenue stream."¹⁰ Owen told the council on Sept. 17 that the request was "a placeholder for consideration."¹¹ This story covers what the board said and did on Oct. 13.

The Oct. 13 meeting opens

The EDC board held a regular meeting at 4 p.m. in City Council Chambers at 5803 Thunderbird. The city secretary certified that the notice was posted by 5 p.m. on Oct. 6.¹² The chair, Justin Loucks, called the meeting to order at 4:01 p.m.^3,12

Four members were present at the roll call.³ They were Loucks, Vice Chair Don Johndrow, Secretary David VonOhlerking, and Jeff Flauding.^3,12 Member Russell Murphy was absent.³ Loucks said members Corey Wright and Jonathan Awtry had resignations and would not attend.^3,12

Mayor Pro Tem Norma Owen, the City Council's liaison to the EDC, gave her report first.^13,14 She said the council will hold strategic planning sessions on its own goals. She hoped a planning round on economic development, with partners such as the chamber of commerce, would follow right after.¹³

The 501(c)(3) vote

Loucks moved the 501(c)(3) item (agenda item IV.2) to the front.⁴ The board's attorney had joined the meeting by then.¹⁵

The attorney said the EDC is already a nonprofit corporation and can apply for the federal status. She said, "I suggest going ahead and getting that IRS status."⁴ She said Economic Development Director Eric Zeno could probably start the paperwork.^4,12 She also said the status is "not gonna allow you to do anything" new by itself.²

Johndrow pointed to the Lions Club, which holds both a 501(c)(3) and a 501(c)(4). He asked whether the EDC would need both. The attorney said she did not think so and would double check.⁴ A board member said corporate grant makers want proof that a group is a charity.²

Members then asked who would do the filing. The attorney said it would probably fall to Zeno and the city's finance department. Owen said a contract with McCoy Consulting could add help if staff cannot cover it.² Johndrow read the EDC's bylaws, which say the corporation "shall contract with the city for financial and accounting services."¹

A board member then moved to start the paperwork and get the 501(c)(3) done. Another member seconded. The chair called for ayes, heard them, and declared the motion passed unanimously.¹

The $49,360 study with no money

Loucks next took the item on funding for a planning firm's proposal (TBA Douglas, agenda item IV.4).¹ TBA Douglas proposes a study of a multiblock area that could lead to a "town center."¹⁶ Its Phase 1 fees add up to $49,360, split among four steps priced at $11,660, $26,100, $6,250, and $5,350.⁵ The proposal caps reimbursable expenses at 3 percent of the total fee.¹⁷

The chair said the item was about process, meaning what the EDC must have in place. Johndrow said that when the board asked Owen to take the request to the council, it was "confident that she would get the $50,000."⁶ Owen said later in the meeting that she had asked the council for a $50,000 allocation, with the TBA Douglas study as an example.¹⁸

Owen said she did bring it forward. She said the city received the same amount of money as last year but has more expenses, so some items went on a list. She asked that the TBA Douglas request go on it. She said the list runs "somewhere around a million to a million and a half." The council asked staff to watch for savings so listed items could be bought.⁶ Later she said, "That is not a funded list."¹⁸

The attorney asked whether the EDC receives sales tax money. A member answered, "Not yet." The attorney went on to say that if the council funds a project, the expense would run through the city as an EDC budget line. She added that the council has approval authority over the EDC's spending.⁷

Flauding asked which part of the city's money could pay the EDC, and whether hotel tax could.⁷ Owen said planning money would most likely come from economic development efforts. She said the budget was "pretty sparse." If something else opens up, she said, the council would need a budget amendment, a council vote that moves budgeted money to a new use. Her example was equipment the city budgeted but did not need, which the council could redirect to a planning grant for the EDC.¹⁹

Flauding then said, "the city is not gonna give us anything at the moment." He said that is why the board wants the 501(c)(3), so it can take donations from corporations legally.²⁰

Owen also spoke about the wider budget. She said the city may need bonds for its water infrastructure, which would force a look at all city spending. She told the board a funding request should come as a plan that says how much money and what for. She said a plan put together next month would not be too soon for next year's budget.²¹

Two seats open

Loucks then took the item on filling the seats Wright and Awtry held (agenda item IV.1). He said the four members present were "the only four that can make up a quorum," the number needed for a valid meeting.²²

Owen explained the steps. Under Owen's steps, the board votes to accept the resignations and then nominates replacements. She said she would probably put the nominees on the council's first meeting in November.²³ Johndrow read the bylaws, which say the council appoints replacements from people the board recommends.²⁴ A speaker said Awtry's term ends Dec. 31, 2026, and Wright's ends Dec. 31, 2027.²⁵

A speaker said both members had sent official resignations, that the speaker submitted them, and that they were filed. Another board member said a vote was still needed to conclude it. The chair invited a motion. A board member moved to accept the resignations and another seconded. The chair declared it passed unanimously.²⁶

The chair urged anyone who wants to serve to get an application in.²³

Art, grants, and the work plan

On a possible deer mosaic (agenda item IV.3), the chair said it was "still to be determined" whether the art would be a deer mosaic at all.²⁷

On the grant writer's report (item IV.6), a speaker said the grant writer had sent a written update but could not join.²⁸ Someone in the meeting asked whether the grant writer should skip any grant that needs matching money. Owen answered, "At this particular time, there are no matching funds."¹⁸

Flauding proposed that the board meet every two weeks for a couple of months. He said he thinks the bylaws require at least one meeting a month and do not bar more.²⁹

The board did not vote on the TBA Douglas money.^30,31 After the grant talk, the chair closed out that item. A board member said, "I don't know if there is an action we can take." The member added that the city "doesn't have any chance of funding that right now, but we have a chance of funding it."³⁰

On the 2026-27 work plan (item IV.5), a board member said the board needs priorities. Zeno said the two new members should get to weigh in before the board sets them. The chair closed out the item with no vote.³²

Minutes and adjournment

A board member moved to approve the corrected minutes of the July 14 meeting, and another seconded. The chair declared that vote unanimous. The chair then said he would make a motion to approve the Sept. 8 minutes, and a member seconded. He declared that vote unanimous too.³³ Flauding raised the every-two-weeks idea again as the meeting ended.³⁴ Zeno said he could find out the schedule, and the board took no vote on it.^31,34 Loucks adjourned the meeting at 5:20 p.m.³⁴

How they voted

The board took four votes on Oct. 13, and all were voice votes. In a voice vote, members say "aye" aloud and no names are recorded. The chair declared each one unanimous.³¹ The agenda lists seven members, and four were present.^3,12

The first vote started the 501(c)(3) paperwork.¹ The second accepted the Wright and Awtry resignations.²⁶ The third and fourth approved the July 14 and Sept. 8 minutes.³³ The video does not name who made or seconded the first three motions. We heard no motion on the TBA Douglas funding, the deer mosaic, the grant report, or the work plan.³¹ The city's meeting portal lists an agenda and packet but no minutes for the Oct. 13 meeting, so the votes come from the video.³⁵

What it means for you

The 501(c)(3) filing has no cost figure in the discussion we reviewed.⁴ The attorney said staff would probably handle the filing, and Owen said a consultant contract could add help. No one at the meeting said which fund would pay for that work.²

The Sept. 17 decision package for the $49,360 study said the package must still identify whether the money would come from an existing EDC allocation, General Fund support, another source, or a new appropriation.¹⁰ On Oct. 13, Owen did not name a fund for the "if money can be found" list.¹⁸

Owen said one route for the study is a council budget amendment if savings turn up elsewhere in the budget.¹⁹ Owen said the list holds many other items, some of them for public works.¹⁸ The adopted 2026-27 budget's opening letter lists six items that staff must fund from within existing department budgets, and the EDC study is not one of them.³⁶ The decision package says Phase 1 "does not approve an eight-phase town-center initiative."¹⁰ The proposal lists seven more phases that the $49,360 does not cover.⁵

Where it stands

The council's Oct. 15 regular meeting agenda listed a work session item to "Discuss the 2027 Economic Development and tourism strategy for the city."¹⁴

What we could not find

• The EDC's Oct. 13 minutes, which would confirm each motion and who made it.³⁵
• Who moved and seconded the 501(c)(3), resignation, and July 14 minutes motions.³¹
• Any cost estimate for the 501(c)(3) filing, or the fund that would pay it.⁴
• A council record of the "if money can be found" list Owen described, with its items and total.⁶
• Any council vote on the $49,360 study.¹⁴
• What the council said at its Oct. 15 work session on economic development and tourism strategy, a meeting we have not yet reviewed.¹⁴

What you can do

• Apply to serve on the EDC board, as the chair urged on Oct. 13.²³
• Watch the city's video of the council's Oct. 15 meeting, whose agenda listed a work session on economic development and tourism strategy.¹⁴
• File a public information request with the city for the EDC's Oct. 13 minutes and the council's list of unfunded items.³⁷

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