City of Amarillo investigating the Amarillo Economic Development Corporation over a wire transfer

AMARILLO, Texas (KAMR/KCIT) — The Amarillo Economic Development Corporation is being investigated by the City of Amarillo over a $750,000 wire transfer from the 2022-2023 fiscal year.

KAMR Local 4 News and MyHighPlains.com have looked into this for several days. We have researched documents and asked for comment from both the City of Amarillo and the AEDC.

“While the City of Amarillo serves as the fiscal agent for the AEDC, it is important to note that the AEDC operates independently from the City of Amarillo,” said City of Amarillo Media Relations Manager David Henry via email. “The city is currently investigating the specifics of this matter, but as this is an ongoing investigation, we are not at liberty to provide a comment at this time.”

According to public documents and Kevin Carter, president and CEO of the Amarillo Economic Development Corporation and the secretary for The RANGE, the AEDC budgeted $100,000 for memberships for the Amarillo Global Food Hub on August 29, 2022, which would eventually become The RANGE. Carter sent this request to the Amarillo City Council for approval. That expense was part of a budget the AEDC turned into the Amarillo City Council for approval.

Published Amarillo City Council meeting information and AEDC budget documents confirm that the requested $100,000 was approved on Sept. 13, 2022.

Carter said he requested this from the city council due to the AEDC not having access to its funds. The City of Amarillo handles all expenditures for the AEDC.

The line item in the budget request on page 9 is under the project support budget in the final budget document that AEDC sent to the city council for approval. That budget also includes other individual project budget items, such as the Amarillo Chamber of Commerce, a Ports-to-Plains Membership, and others.

However, this number would increase to $750,000 per wire transfer in January 2023 according to Carter. Carter said in an interview with MyHighPlains.com that this $750,000 was requested by Carter and approved by the city on the same day on Jan. 20, 2023.

“It happened on January 20, 2023, it was for $750,000 and it was for three years of membership in a 501(c)(6) nonprofit called The RANGE,” said Carter. “The wire transfer was initiated by me, but the AEDC does not have access to its own funds. We use the city as a fiscal agent, and the city administers those funds on our behalf.”

Carter stated that the city is investigating and was brought to AEDC’s attention in a meeting that was attended by Cole Stanley, mayor of Amarillo, Grayson Path, city manager, Andrew Hall, Board Chair for AEDC, and a former Board Chair for AEDC and Carter.

“The mayor asked us to visit with our attorneys and present our findings,” said Carter.

Initial research conducted by MyHighPlains.com staff did not locate publicly available documents relating to the approval of the $750,000. After reaching out to officials with the city, MyHighPlains.com has requested these documents that would detail this approval.

AEDC released its full brief to MyHighPlains.com which was created by their lawyers and was sent to city officials on Aug 19, 2024. According to this brief, the AEDC was unaware of what The RANGE’s founding member annual membership fee would be thus the $100,000 line item for the Amarillo Global Food Hub Membership, which operates now as The RANGE.

The brief stated the founding member membership fee for the RANGE was set after budget approval at $250,000 annually. The RANGE requested that AEDC prepay the first three years of membership fees for a total payment of $750,000; according to the brief, AEDC used leftover funds from marketing and project support expenditures to complete that payment without requesting additional money from the city. AEDC’s brief noted that this was paid due to “sufficient room” in the approved budget and as allowed by page 25 of the City of Amarillo Accounting Policies and Practices.

The section of this policy that the brief is referring to states, “Expenditures may not legally exceed appropriations at the fund level for each legally adopted annual operating budget. The City Manager may transfer appropriation balances from one expenditure account to another within a department or fund. The City Manager may also increase revenue and expenditure budgets by corresponding amounts when unanticipated outside funding is received. This adjustment must have no net effect on a fund’s budget. The City Council must approve revisions that alter the total expenditures of a fund. Under the City’s budget ordinance, the City Council has the authority to make such changes in the budget as it deems warranted.”

According to the brief, this means that because the cost of the membership could be covered by already-approved funding, the AEDC in this case did not need to seek further approval to move already-approved money from one line item to another – in this case, using unspent money from marketing and project support expenditures to add the needed $650,000 to The RANGE (then known as the Amarillo Global Food Hub) item’s total.

The city is still investigating the matter and has yet to release its conclusion.

“I received a letter from the AEDC attorney yesterday (Monday, Aug. 19) regarding this expenditure. The staff and council are reviewing all documents and are committed to completing our due diligence on this issue to ensure that we fulfill our fiduciary responsibility to the law,” said Stanley. “We hope to know more next week.”

For the latest Amarillo news and regional updates, check with MyHighPlains.com and tune in to KAMR Local 4 News at 5:00, 6:00, and 10:00 p.m. and Fox 14 News at 9:00 p.m. CST.