bloggin' all things brownsville

Tuesday, September 16, 2008

Incentives Go Awry

BATB NOTE: Dear all --- I am expecting some new information next week that will likely change my opinion on this particular issue. Once received, I will write a new blog post with up-to-date, corrected information, and a opinion that will likely be contrary to that of this original post. ~Melissa


Another company can be added to the list of those the Brownsville Economic Development Council (not committee, Herald) or the Greater Brownsville Incentives Corporation have provided incentives to, but disappoint.

The BEDC is providing Teleperformance, a call center that opened in December, $50,000 over three years. The incentive was given in return for the company's promise to provide 35 jobs that pay a minimum of $9 per hour.

So, the company lays off about 200 employees this month, or 40 percent of its workforce, and BEDC doesn't demand a return on its investment, because those 35 jobs are still provided?

Hogwash. How do they know which jobs those are?

A provision in the BEDC/Teleperformance agreement requires the company to repay the incentive money if it fails to meet BEDC's conditions.

Let's see. Thirty-five jobs kept, but more than 200 lost. Yeah. I still don't get it.

I recall when BEDC President/CEO Jason Hilts touted an end-of-the-year 5.1 percent unemployment rate in his Snapshot of a Growing City, Brownsville 2008 fluff piece. Hilts gave USA T-Mobile and Teleperformance credit for the low unemployment rate, because both entities committed jobs totaling 1,700 jobs.

Is T-Mobile next?

It's not a matter of being pessimistic.

It's simply a matter of record when it comes to a growing list of companies BEDC or GBIC have assisted -- companies that take our money -- and fail to perform. Titan, Trico, Teleperformance...

Let's hope that "economic boom" State Comptroller Susan Combs is predicting for South Texas happens soon.

29 Comments:

Anonymous Anonymous said...

If the company still employ 35 people, they still qualify for the incentive. Simple math... look in to it.

Wednesday, September 17, 2008  
Anonymous Anonymous said...

And to add insult to injury, you have a lawyer in Brian Janis billing GBIC over eight thousand a month for services he claims he does. There hasn't been a lot of movement at GBIC. Why the outragous invoices? Maybe he is working hard but at what I dont know. Should taxpayer money be going to a lawyer who is currently suing the city in trying to deannex Riverbend Resort? Deannexing Riverbend would cost the city to lose property tax and sales tax. We use sales tax to pay Janis at GBIC. Conflict of interest? Our city attorneys believe that is is a conflict of interest. The city attorneys have agreed to handle GBIC for no additional costs. That is a huge savings in itself and builds more communication between them and the city. I for one would of held him accountable years ago. Chairman Ruben Gallegos has vowed to take care of this problem and I hope he does. He is a man of his word. Other members of GBIC has stated to me that this is a problem that needs to be addressed. GBIC should have a clause in their contract that states that companies should pay back when they cut jobs. We are still paying for the Titan fiasco. This is another reason why the 4A board should work with the city staff even more. I don't blame the members of GBIC. Maybe we have to replace some of them but the problem stems from the city not having any control of the people's tax dollars. Something needs to give.
CHarlie Atkinson

Wednesday, September 17, 2008  
Anonymous Anonymous said...

The incentive for those 35 jobs was also contingent on the many other jobs Teleperformance said they would provide.

It's not simple math. It was a simple bargain, and Teleperformance didn't meet its end of the bargain.

Wednesday, September 17, 2008  
Anonymous Anonymous said...

Finally, something coherent from the commissioner.

Wednesday, September 17, 2008  
Anonymous Anonymous said...

How many more failed BEDC projects does there need to be for someone to start holding GBIC/BEDC accountable? This latest failed project makes me want to throw up. It's not even funny anymore. Comm. Atkinson: why are we tolerating such waste of taxpayer money? Get rid of the contract GBIC has with BEDC and hire a city staff person to handle all economic affairs. You would save $500k in just administrative costs. This would also give the City more control of the 4a moneys. Just a thought...

Wednesday, September 17, 2008  
Anonymous Anonymous said...

Unbelievable! And the county just raised our taxes....I feel raped!

Wednesday, September 17, 2008  
Anonymous Anonymous said...

I agree with anon but it is easier said than done. Some see it as political suicide to go after holding GBIC and BEDC accountable. Thank god I don't play into those types of political pressures. People constantly come up to me and ask me why BEDC pays huge rents to the University. They could easily be housed at the city for free. They ask me why alot of the 4b monies are spent on administrative costs. I agree with these people but I do hope we can fix the problem. The first thing is to recognize is that there is a problem in which we have. The second thing to do is to stand by city staff in wanting to take better control of the 4A board. There are talks to put 4A under 4B so the city can oversee it. I don't agree with that but I do think Charlie Cabler has to take some sort of action to hold people accountable. The only problem is the politics. 4A board members would play politics and put pressure on the commission to be left alone. If the commission would stand by Cabler and Jim Goza and assist in holding 4A accountable, tax payer monies would be better protected from waste and abuse. I still don't have all the answers but the people are holding me accountable so therefore I must do the same. People who read this blog should talk to the commissioners they know and ask for more accountability.
Charlie Atkinson

Wednesday, September 17, 2008  
Blogger Chris Davis said...

"The incentive for those 35 jobs was also contingent on the many other jobs Teleperformance said they would provide. "

Not saying you're wrong, Anon. But prove it.

Prove that the incentive wasn't solely tied to a mere 35 jobs at $9/hr.

Otherwise, Telepeformance owes GBIC nothing.

Wednesday, September 17, 2008  
Anonymous Anonymous said...

"Otherwise, Telepeformance owes GBIC nothing."

Are you kidding me? From what I understand, the only reason they were given an incentive for 35 jobs was because those were the jobs that Teleperformance was willing to commit to that $9/hr wage. So while they may be compliant having 35 jobs paying at $9/hr, it doesn't mean we shouldn't hold GBIC/BEDC accountable for not inserting in the agreement a clawback clause that allows for the company to reimburse funds for any loss of employment. I mean, it just makes completely no sense that the company is able to receive incentives when they are downsizing the overall labor force.

This is yet another reason why GBIC should stop funding BEDC because BEDC is who recommended for that incentive structure to be in place in the first place. You can add Teleperformance to the list of many failed projects that BEDC has attracted and supported.

Wednesday, September 17, 2008  
Blogger BobbyWC said...

Has there ever been an audit of these groups to see if the city has actually every received a benefit for its investment?

Just asking

Bobby Wc

Wednesday, September 17, 2008  
Anonymous Anonymous said...

Hey CD, quierias mas! I'd like to see your response to Anon's wise input.
Charlie Atkinson

Wednesday, September 17, 2008  
Anonymous Anonymous said...

Everyone knows Teleperformance was a quick deal that Terry Ray, "owner of Building" and BEDC orchestrated because the building was just sitting there the Rays were losing money. Chris Davis, stop protecting special interest! You are so predictable. Always protecting the good ole boys uh Davis.

Charles Atkinson

Wednesday, September 17, 2008  
Anonymous Anonymous said...

Does someone know how much BEDC gets from GBIC? And also, what other sources of revenues does BEDC have? I would venture to say that the GBIC monies provided to BEDC comprise more than 90% of their revenues.

Thursday, September 18, 2008  
Blogger Melissa Zamora said...

Chairman Ruben Gallegos has vowed to take care of this problem and I hope he does. He is a man of his word.

Finally, something I can agree on with the Commissioner.

Thursday, September 18, 2008  
Anonymous Anonymous said...

Open your mind Melissa and take the blinders off. Your head has been so far up the special interest a** that you haven't been seeing straight lately. Your personal life has clouded your judgement on many things. I could care less if you agree with me or not. Especially from someone who cries when they don't get their way on a committee that you should serve in the best interest of the citizens. You are having one too many drink sessions with Chris Davis.

Charlie Atkinson

Thursday, September 18, 2008  
Blogger Chris Davis said...

"Are you kidding me?...
...it doesn't mean we shouldn't hold GBIC/BEDC accountable for not inserting in the agreement a clawback clause that allows for the company to reimburse funds for any loss of employment."


Two completely separate arguments, Anon.

Prove up the actual incentive agreement. Heck, even FOIA it, as that often works wonders (right, GTC?) If it shows that Teleperformance only had to deliver 35 $9/hr jobs, they owe GBIC nothing. Plain and simple. In that case, blame GBIC/BEDC all you want.

"Hey CD, quierias mas!"

Now who's the "charred burnt stick", GoodTime?

Thursday, September 18, 2008  
Blogger BobbyWC said...

"Everyone knows Teleperformance was a quick deal that Terry Ray, "owner of Building" and BEDC orchestrated because the building was just sitting there the Rays were losing money."

Correct me if I am wrong - if BEDC helps someone with an empty building find a tenant - it is part of the good old boy process screwing the people?

This is why this city is so freaken screwed up - if it is not BEDC's job to help fill empty commerical buildings what is it?

The BEDC investment was 50k - the payroll had over 200 people earning an income - 50k is chump change when compared to the actual annual budget of Tele.

While it is sad the business failed - how much food did the payroll for these 200+ people put on the tables in Brownsville - how much tax revenue was generated by these incomes and the spending they created.

It is never so simple that the business failed. You must compare the economic impact to the investment. If the economic impact surpasses the investment then it is a good investment.

Yes they folded - this is bad -

I am not defending the BEDC - I do not know why this is not handled by the city. I hate these endless new entities which only create jobs for the politically connected.

I am not defending the management at BEDC - you can make good investment decisions while having
too many politically connected people on the payroll. These issues need to be separated.

My only issue here is, how stupid the argument was being presented - BEDC finding a tenant for an empty commercial building is some how bad.

Just plain stupid

Bobby WC

Thursday, September 18, 2008  
Anonymous Anonymous said...

Did anyone even know Teleperformance was in operation? Nobody at the city knew until the Newspaper came out with it. The contract that was written up was done without transparency to the city and this is what I mean that the city needs to be more involved. Some board members just follow what Janis tells them. Some on the board think he is the smartest lawyer in the valley. Wake up people or change will come. We can't afford another mishap with BEDC.

Charles Atkinson

Hey Chris, I didn't write that spanish phrase. Someone else used my name. You are such a puppet. Everyone knows you and little Eddie Trevino are in bed together and I will make that known in do time. Your sadistic outlook on politics and special interests will hurt him too because of your involvement. I like Eddie but you are making it difficult for me and my family to support him. A lot of people ask me who I will be suppporting for county judge. You handling Eddie Trevino's P.R. will come back to haunt him. When I see him, I let him know that. I'm democrat but Cascos is looking real good if Eddie Trevino is going to use idiots like you to run his campaign. I wonder if he knew just how many people out there dislike you.


The real charles Atkinson

Thursday, September 18, 2008  
Anonymous Anonymous said...

This is a perfect example of people talking with out knowing what is going on. First Teleperformance has not recieved a single cent. Because of the policies that GIBC has adopted this company will not recieve any funds because of the layoffs. But people in Brownsville just speak without knowing what the facts are. This is why our city is heading in the wrong direction. Then we have commissioners that want control of additional funds so they can also use then in ways that make no sense to a good business person. 4B is operating in the RED, where as 4A has always operated in the BLACK. And they want more money, they want someone who has no knowledge of economic developement in charge or give it to the city mananger who can barely do his job. You tell me who is not in touch with reality. But if they really had the cities interest at heart then the commission needs to look at what they are doing first and correct their problems first and then try to work on others. The problem is we have persons running our city (which is a busines) who have no knowledge of how to run a city and who all they are doing is putting our city into deeper debt. But all they do is try to put the blame somewhere else or try to get their hands on tax payers money so they can blow it like all the rest of the funds they recieve. When I hear that our city leaders and administrators take responsibilty for their lack of performance then I will maybe start to believe in them. But I doubt very much that anyone of them will ever step up to the plate and admit that they have no idea of what they are doing. Citizens of Brownsville its time to clean house and start all over, commissioner, administrator, some directors, etc. Please make it known that notice has been served.

Friday, September 19, 2008  
Blogger Melissa Zamora said...

First Teleperformance has not recieved a single cent. Because of the policies that GIBC has adopted this company will not recieve any funds because of the layoffs.

BEDC spokesperson Gilberto Salinas was quoted as stating that Teleperformance would not be required to return the money. Is there miscommunication somewhere?

Friday, September 19, 2008  
Anonymous Anonymous said...

Wow, I bet someone from Gbic wrote that last memo without putting a name to his words which makes him insufficient. GBIC is a big problem because they have invested in failed businesses. 4B is paying a bond but we have something to show for it. GO out to the Sportspark and look for yourself. Its an investment for our children and families of Brownsville. 4A has some good people on it but for the most part it is waste and abuse. The mayor introduced 4A and 4B in 1990 and it started in 1997. I cant recall what good business 4A has brought to Brownsville that has lasted not counting t-mobile because they just started. The commissioners are to blame because they allow this unjustice to go on. People on GBIC need a gut check and they need to stop acting like they are untouchables. Either work with the city or resign. As a commissioner, I am making this stance. We didn't raise taxes so we have to cut in different places and sour grapes will fight the cuts. Charlie Cabler does magic with what he is given. Shame on the gutless anon who refused to put his name to it. I know who wrote it and it figures he would be a chicken shit by not manning up to his words. Oh yea, stop spinning and tell the truth. The reason 4A is in the black in because of Atty. Ernesto Gamez. He invested in land and GBIC sold it and made some good money on it. Without that, they would be in the red with nothing to show for. BEDC needs to be housed at the city building, GBIC atty. needs to have his wings clipped, and the GBIC board itself needs to be held accountable. If there are people out there that want to be involved in GBIC, send me your application. You can download it from COB.US. It's time to shake the tree.

Charles Atkinson

Charlie Atkinson

Friday, September 19, 2008  
Anonymous Anonymous said...

We know who is paying for commissioners Atkinson's reelections campaign. And Mr. Gamez didn't do anything until GBIC was told what was needed in our community by someone from the outside. But some people are not out there for glorification so they do not make a big deal about giving some good advice and it doesn't matter if saomeone else want to take the credit as long as the right thing gets done. Again this is another perfect example of people not knowing what the truth really is. But commissioner like to talk and make a mess of things then they are gone in four years and no one hold them responsible for anything. And yes 4B is paying for the bond, a bond that will not be enough to complete the project and so does that mean we are going to have only half a park or do they have to fine money somewhere else so they can complete their pet project so they can say look at what I did. Yes we need to do things for our future generations but we have to do it in a business like manner not in an asinine manner. We have so many park that we can't even keep up with and we are building more, I would bet money that they haven't even thought on how they are going to maintain it. Or where the funds will come from. But no matter commissioner you won't have to worry about this, you won't be around for anyone to hold you rsponsible for it. If you want to impress the citizen of this city get everything done without raiseing taxes without binding our FUTURE generations to debt they probably don't want. Fix our streets, clean our city up, lead project that will make our city independent of taxes. And get your facts straight, the city and PUB are still making money from Titan and I bet you have no idea about this. Nor the other person who talk about how bad Titan was for this city. Plus they were able to gain control of 76 Acres which will now converted in an Industrial Park for our city. Which is at least 1/3 committed already to companies interested in locating in Brownsville and which will be paying for this land and the money going back into the GBIC funds thus giving the citizens of Brownsville a good return on their tax dollar. Now can you tell the citizens what the commission is doing to make money for the tax payer of this city so that you don't have to keep being dependent on taxes. NOTHING except getting the city into deeper debt by continuing to issue Bonds or refiniancing them over and over and over. Is that the business sense you all bring to the table. I think we can do without. time to clean house.

Friday, September 19, 2008  
Anonymous Anonymous said...

GBIC just allocated (8.8 million dollars) money to the city so they could fix up the airport because they know that the airport has been supplemented with over 2 million dollars every year just to keep operating. Because they know that the airport is a great asset to our city and that something needed to be done. The city nor the airport Board or administration can come up with way to make the airport self suffient. They have a Chairman (that has been there for years) that has no idea on how to do this and is out of touch with reality and whose time to move on is way over do. Why dont you say anything about this commissioner. Do not get mad commissioner listen to what you are being told, that's the problem you all think your way is the only way and if this were true our city would be a whole lot better off than what it is. I insist time to clean house citizens of Brownsville, lets fine some people we can trust , who have business experience, who have had success in their own business, who are willing to take responsibilty for their actions and are willing to unite and not divide our city. And boy do you divide commissioner, you are not part of the solution you are part of the problem. Why dont you just resign and let the people of Brownsville fine someone better which shouldn't be that hard

Friday, September 19, 2008  
Anonymous Anonymous said...

So based on the article in the Herald, BEDC agreed to give this company $50,000 in incentives over a 3 year period. In return the company would agree to provide 35 jobs paying $9 per hour.

$9 per hour X 40 hour week = $360 per week

$360 per week X 4 weeks = $1,440 per month

$1,440 per month X 12 months = $17,280 per year

$17,280 per year X 35 guaranteed jobs = $604,800 per year

So BEDC gives $50,000 in incentives over a 3 year period and the company guarantees $604,800 per year to put into our local economy.

Wait! There’s more! The company didn’t just bring 35 jobs. The article said it actually had 500 jobs. I have to assume the additional 465 jobs over the guaranteed jobs were not $9 per hour but lets assume they were at least $6 per hour. With that assumption and only going 10 months because of the recent layoffs it appears the company pumped in an additional $4,464,000 into our local economy. Also they still have roughly 300 employees which should continue to pump about 2.5 million dollars a year into our local economy.

So based purely on the article I see that this company has already injected over 5 million dollars into our economy. All this for the $50,000 incentive over a 3 year period.

My question is, why do we have a problem with this?

Friday, September 19, 2008  
Anonymous Anonymous said...

You are right it time to shake the tree, but once again you are looking at the wrong tree to shake. You need to look at your tree first and yourself first and then at others. You have to get the city commission in order first. It is sickening to see what goes on during the city commission meetings and you want to blame other intities in our city , wake up and smell the coffee. Show us you are willing to accept some responsibilty for the mess we have at city hall. If not step aside there are persons in this great city of ours that are willing and very capable of doing the job, can't get any worst than what it already is.

Friday, September 19, 2008  
Blogger Patricia said...

So based purely on the article I see that this company has already injected over 5 million dollars into our economy. All this for the $50,000 incentive over a 3 year period.

My question is, why do we have a problem with this?


I agree with your assessment, anon. I would go even further and say that they haven't yet failed. They are taking the necessary measures to stay afloat, that is, they are cutting costs. That's what a lot of companies are doing due to the current economic crisis.

The pressure on GBIC should be to continue to diversify the businesses it brings to the city to guard against economic slowdowns that may affect one particular industry more than others.

However, I do agree with the Commissioner that the City should be able to exercise more oversight over GBIC and BEDC. GBIC should come before the Commission and explain BEDC's administrative costs.

Patricia A.

Friday, September 19, 2008  
Anonymous Anonymous said...

Wow mayor, all this advice without being man enough to leave your name to it. No backbone and all talk and grandstanding. What division do you talk about. You against six. That is not division, it is a blessing so an idiot mayor like yourself will not hurt this city even more. The rest of the commissioners arn't perfect but they are willing to communicate. Your weir dam bullshit keeps costing the citizens lost of wasted tax monies. You blatant expensive trips in private jets will cost you your next election. I know you are just trying to take us down with you but we are a lot smarter than that to fall for your tactics. Chin up Mayor, you brought this upon yourself. Take it like a man. Your third attempt to tax the citizens of Brownsville failed and you will have to pay for that.

Charlie Atkinson

Friday, September 19, 2008  
Blogger BobbyWC said...

First let me say I loved this discussion. This is when blogging is at its best. I think people have a lot better idea about what is happening at BEDC.

My question to Atkinson is, as crime goes up because the city commission continues to turn a blind eye to the lack of sufficient law enforcement and emergency services, who will pay that price?

The people -

And it will be the people who decide who stays and who goes. The people are fickled - they will not care one iota who anyone voted on taxes.

Bobby WC

Friday, September 19, 2008  
Anonymous Anonymous said...

And in the midst of layoffs and shop closings, the PUB board awarded an already overpaid executive even more money....a $20,000 raise to over $180,000 per year (not counting other benefits...insurance, car, phone, travel) Maybe PUB pays his maid service....like TSC pays Juliet.
When we make such raises for top management we tell other PUB employees that there will be a hiring freeze and freeze on wages.
We create only minimum wage jobs here. Why, because BISD grads have no skills and UTB grads have no skills and believe a diploma is a free ride to a good pay check. Business don't come here because of lack of labor force skills. BISD and UTB are diploma mills that graduate non-competitive workers...who can't prepare a proper resume, don't understand how to interview and surely don't dress for success. They do feel entitled to a free ride.

Monday, November 17, 2008  

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