Council expands audit latitude and moves to recoup assets after Onshore fails hiring targets

The Crockett City Council voted to remove language from the Crockett Economic and Industrial Development Corporation’s bylaws that limited audits to "the previous fiscal year," a change council said will allow shared funding for a forensic audit that reaches back farther than one year.

Councilors debated authority and cost: some members said the council has the authority to amend the CEDC bylaws while others emphasized the corporation’s separate board role. After discussion, a motion to delete the words "for the previous fiscal year" carried on a voice vote, giving the council latitude to determine whether and how to share audit costs if the scope extends beyond one year.

Work on the CEDC budget was delayed at the corporation’s request, and council agreed to table approval until the next meeting to give members time to review the materials.

On economic-development contracting, council ratified the recently negotiated second amended incentive agreement with Onshore Technology Services dated 04/01/2019 so council and staff could act on the same document. The amendment had lowered the hiring threshold during the COVID period; staff said it was the most recent signed version.

Later, council considered declaring Onshore in breach after staff presented a report that the company had not met its employee thresholds. Staff explained the agreement includes a performance clawback of $500 per unfilled job — roughly $15,000 based on the reported shortfall — and identified additional unpaid utility and security-related costs. Economic development staff said Onshore has offered to relinquish the city’s share of the facility generator and the security system as part of a settlement; councilors discussed whether legal fees to sue would exceed recoverable amounts.

After debate, a motion carried declaring Onshore in breach and directing staff to pursue recovery of assets where feasible but to forgo formal litigation at this time. Council members said the aim is to balance recouping taxpayer funds against legal costs.

Next steps: staff will work with the economic development corporation and legal counsel to document recoverable assets, the estimated net recovery and any contractual remedies available under the incentive agreement.