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Joint City Council /PEDC Meeting September 15, 2014 Page 5 Moore said all expenditures need to go through the Board and go to Council for approval and that could be done through the budget. With regard to the Red River Region Business Incubator Review, the report reflects there was a lack of fiscal oversight, and State Law has already addressed that. He said they could fund the incubator, because the emphasis under this project was for manufacturing and if it is under 501.101, you could provide monies for manufacturing, you could provide land, buildings, equipment, facilities, targeted infrastructure as well for manufacturing, and you could pay for job training expenses. He said Regionnavate was business recruitment with a third party, and that is allowed if you have a written contract. He suggested contracts be on a reimbursement basis, meaning once the work is done and the receipts are turned in, then payment is remitted. Mr. Moore suggested amending bylaws, which includes policies addressing travel. He said they want to look at an incidental per diem, have a per diem for travel, promotional expenditures, keep those separate, and segregate those because you're limited to 10% for promotional purposes. He also said they may want to consider a non - compete provision. He said he didn't see anything criminal in his review, maybe there was waste because that it didn't work, and it didn't achieve the objective. He also said it was not fraud, but there could have been better bookkeeping. Mayor Frierson asked if anyone had any questions. Council Member Hashmi inquired about the difference between 4A and 4B, as he understood Mr. Moore to say that almost every expense was doable under 4A such as infrastructure and roads. Mr. Moore explained that Type B was under Chapter 505 of the Local Government Code and the main difference was Type B had some procedural issues that Type A did not. He said Type B required that notice of the projects be published in the newspaper and there was a waiting period of sixty (60) days before the project could be funded. Council Member Hashmi asked if that meant creation of manufacturing jobs under 4A was not required. Mr. Moore said that was correct for some provisions and that Section 501.103 allows for infrastructure for a business development. Council Member Lancaster confirmed with Mr. Moore that a Type A or a Type B Corporation could not give proceeds to a business entity without a performance agreement. She said the R313I was given a considerable amount of money in excess of 10% and wanted to know how that could be achieved without a contract. Mr. Moore said there should have been a written agreement. Council Member Lancaster inquired if that was a violation and Mr. Moore said there was not a criminal penalty for it. Council Member Lancaster said she did not say criminal, but asked if there was a violation. Mr. Moore said it was inconsistent with State Statute. She said she was submitting that it did happen and she had the numbers to prove it was considerably more than 10 %. Mr. Moore said promotion was limited to 10% of any sort of expenditure, such as a project, job training or promotional activity and there should have been a written agreement since they were dealing with public funds. He also said the written agreement should have been approved by the Board and approved by the City Council. Council Member Lancaster asked what relief could be provided since that did not occur. Mr. Moore said over the years there were a number of court cases that dealt with expenditures, which reflected a tax payer could bring suit. Mr. Moore stated what the Courts had done thus far was rule that the impermissible expenditures