Karnes City council members tried to patch things up with county economic development leaders during a special budget meeting August 7.

For the past several years Karnes City has contributed $12,000 annually to the Karnes County Economic Development Corporation.

Last year’s contribution amounted to less than one half of one percent of the city’s $2.46 million in total projected expenditures for the 2006-2007 fiscal year.

It’s almost time for Karnes City to finalize their budget for the coming fiscal year and the decision whether or not to keep making a financial contribution to county economic development efforts is one council members will have to make.

Karnes County Economic Development Corporation Director Terry Trevino and board treasurer Trip Ruckman addressed council members during the meeting, making their case for what the corporation has done for Karnes City in the past three years.

Council member Leroy Skloss said the relationship between economic development and city officials hasn’t been as good as it should be and that communication should improve because San Antonio is "coming this way."

Ruckman addressed the concerns that Kenedy was getting all the economic development and Karnes City was being left out.

"It’s true," he said, but he also noted some of the difficulties Karnes City is facing.

Around 40 percent of the property in town is owned by two different families, he and Trevino said, and a large portion of the city is landlocked.

On top of that, traffic counts through Karnes City don’t meet the specifications required by larger commercial chains. State Highway 123 gets about 7,000 cars through per day and U.S. Highway 181 gets about 11,000, according to discussion.

Both fall short of the 17,000 a day needed for expanding industry to take notice (Kenedy has about 14,000 cars a day at their intersection). Economic development can help things along with a traffic count lower than 17,000, Trevino said, but numbers closer to that golden figure are easier to sell.

"I think we need to get involved more," City Administrator Larry Pippen said. "We’ve never had the opportunity to sell Karnes City."

Ruckman said economic development officials will try to work closer with the city in the future, but he and Trevino also mentioned part of that responsibility is placed on the shoulders of economic development board members.

Two members were elected by Karnes City — James Adams and David Purser — to represent the city’s interests, and those members should be interfacing with city officials and updating them on progress, Trevino said.

In addition to the two members elected specifically, Trevino pointed out half of all the board members reside within the Karnes City zip code area.

Trevino and Ruckman also presented council members with a list of projects the corporation has been working on that directly benefit Karnes City.

Among them were a nationwide hotel chain that has visited Karnes City, the Otto Kaiser Memorial Hospital expansion, a doughnut shop currently under construction, a Mexican food restaurant expansion, a residential development corporation that has visited Karnes City, two nationwide restaurant chains that have looked at sites in town, and a country-western store that has visited the area and submitted a business plan.

The nature of economic development, though, requires most of the details about upcoming projects to be kept secret until details become finalized.

City leaders did not make any official decisions as to whether to continue funding economic development efforts.

Council members also addressed the issue of slumping water sales and its impact on the city budget. Wet weather all this year has put the city behind about $100,000 in projected water revenue, which can potentially cause a problem, according to discussion.

Pippen said the city’s general fund is "still doing excellent," though, and that "sales tax is doing great, but we can’t live off strictly sales tax."

Property tax collections also are behind estimated values, and Pippen advised council members take those numbers into account when preparing the next year’s budget.

The city garbage collection issue also was briefly touched on. Pippen presented three options, only one of which he recommended.

A bid from refuse collection provider Alamo 1 came in at a price that would bump city residents’ monthly garbage bills up to $22.85, and Pippen said that figure was too high.

Provider IESI placed a bid that would bump the monthly garbage bill to $18.10, which Pippen said was acceptable considering IESI also would offer five yards of brush pickup per month and participate in an annual cleanup project.

He also looked into privatization of the city’s garbage collection, but initial startup costs would require an immediate loan of $400,000. That price tag along with unknown future fuel prices led Pippen to recommend the city go with IESI’s proposal.

Council members voted to authorize Pippen to proceed in negotiations with IESI.