Approval of this item will amend and renew the Memorandum of Understanding (MOU) between the City of Buda and the Buda Economic Development Corporation. The MOU details services provided by the City of Buda in support of the Buda EDC and the compensation for those services.

The original MOU was entered into between the City of Buda and the Buda EDC in 2013. The services needed and provided by the City of Buda since the original MOU was adopted has changed. 

Under this MOU, the City will provide the following services:

• Investment, Financial and Accounting Services: Budget preparation and maintenance, monthly financial reporting, accounts payable, bank reconciliations, payroll transaction import into the financial system, and external audit support.
• Information Technology Services: General IT support, system administration, cybersecurity compliance, and access to City infrastructure (with reimbursements based on actual costs).
• Contracted Services: Includes investment advisory, external audit, and liability insurance.
• Development Project Manager: Shared cost of a City staff position that provides direct assistance to local businesses navigating the City’s development process.

The agreement formalizes the reimbursement arrangement required by law, under which BEDC pays the City for the actual costs of these services. It reinforces the long-standing partnership between the City of Buda and BEDC, strengthening operational efficiency while supporting BEDC’s mission to grow and expand the local economy.

The Buda EDC Board of Directors will review the proposed MOU at their meeting on September 14, 2026. The MOU is for a one-year term with automatic renewals. Either party may terminate the MOU by providing a 60-day notice.

The MOU is for a one-year term effective October 1, 2026, with automatic renewals. Either party may terminate the MOU by providing a 60-day notice.

The Buda EDC's approved FY 2027 budget includes an amount of $180,300. This is $9,800 less than the prior year amount of $190,100.

Major changes from prior year:

• Removal of payroll record maintenance services (now outsourced by EDC) 
• Removal of legal services

Pros

• Documents the actual-cost reimbursement arrangement
• Avoids duplicate staffing, systems, and contracts by leveraging existing City capacity.
• Keeps BEDC on the City's financial system and audit cycle, preserving consistent internal controls.
• One-year term with 60-day termination allows either party to adjust as needs change.

Cons

• The $180,300 is an estimate; actual-cost components may vary from the adopted amount.
• The decrease reflects services shifting to BEDC, not a net reduction in BEDC's overall administrative cost.

Do not approve the MOU.