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Under the deal, Infinity Insurance proposed opening a local call center, which would Fendi Monster Bag White
"Not properly vetting companies can allow businesses that are not financially stable or viable to participate," according to the audit report. "The payout structure may also lure untrustworthy businesses."
The McAllen City Commission approved 26 Fendi Mink Purse
By Dave Hendricks, The Monitor Posted 5 months ago
development deals and paid nearly $2.5 million under the program from 1999 to 2011, according to the City Auditor's Office. Results were mixed.
"MEDC will increase standards of vetting, making sure that companies are not created solely on supplier contract in Mexico with intent to dissolve once the Mexico contract is terminated," according to the audit report.
Both short term manufacturing contracts and the recession impacted the program, said City Commissioner Trey Pebley, who reviewed the audit report. With minor tweaks, McAllen will keep working to attract manufacturers and other new employers.
McAllen typically pays business prospects for every job created or partially refunds the company's property tax payments over five years. McAllen pays gradually, which limits potential problems.
"If it were up to me if I were Barack Obama tomorrow I would say 'No,'" said Keith Patridge, who heads the McAllen Economic Development Corp. "I don't like them. But the problem is: If you want to play, you've got to pay."
"For the seven companies that were successful, $1,353,665 was expended from city funds," according to the audit report. "For the 19 companies that did not successfully establish a lasting business in McAllen, $1,127,450 was expended from city funds."
second year was 75 new jobs and the company created 36. In year three, the target was 25 and the company created five jobs," according to the audit report. "The amounts paid out for the incentive and tax rebate were not proportionately decreased to reflect the missed targeted job quotas. The MEDC just pays the incentive when the annual reports are turned in and the employees qualify as full time employees (as defined) up to the maximum incentive over the five year period."
While 19 businesses apparently fizzled or flopped, the surviving seven now employ about 2,500 people.
McALLEN Businesses recruited through the city's "380 Job Creation Incentive Program" routinely break their contracts or shutter their McAllen locations within two years, according to the City Auditor's Office.
Auditors didn't find any fraud, but warned the McAllen EDC didn't have adequate documentation showing the business prospects were financially viable.
By July 2013, the company had created 229 jobs, according to data kept by Deputy City Manager Brent Branham and reviewed during McAllen's last budget cycle. Branham wasn't able to provide current data and attempts to contact Infinity Insurance for comment were unsuccessful.
In exchange, McAllen agreed to pay Infinity Insurance $1,000 for every job created and partially refund the company's property taxes over five years, according to the agreement. The city paid $100,000 up front, based on Infinity Insurance pledging 100 jobs the first year.
The city Audit Committee reviewed the findings on March 6 and McAllen released the documents Wednesday following a public information request from The Monitor. McAllen inked the deals under Chapter 380 of the Texas Local Government Code, which allows municipal governments to offer business incentives.
Overall, 73 percent either broke their contract with McAllen or shut down within two years, according to the City Auditor's Office. Additionally, McAllen occasionally paid incentives even when the company didn't comply with the agreement.
operate for at least five years and eventually employ 250 full time workers. Infinity Insurance agreed to pay full time workers at least $12 per hour with a minimum 1,600 hours every year $19,200 annually for working nearly 31 hours every week.
incentive deals didn't create lasting jobs
Auditors, though, Fendi Card Case Monster questioned how McAllen vetted business prospects and advanced money during the initial contract year.
"And just tighten up the management a little bit to make sure we're getting the best deal we can for our money," Pebley said. "So I think we're learning the lessons at an opportune time and now we need to move forward and capitalize on what's out there.".
Following the audit, the McAllen EDC pledged to tighten internal controls.
"I was shocked to learn that," said City Commissioner Scott Crane. "And I was just under the assumption that better controls were in place."
Audit: 735 of McAllen's job incentive deals didn't create lasting jobs
The City Auditor's Office recounted how the City Commission approved a deal with Birmingham, Ala. based Infinity Insurance during January 2008. When the company missed job targets, City Hall and the McAllen EDC paid incentives anyway.
"The job target in the Fendi Roma Roll Bag
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