BY CHUCK VANDENBERG
FORT MADISON – A discrepancy in interpretation of the City of Fort Madison’s commitment to the county’s economic development efforts resulted in a vibrant discussion between city officials and representatives of the Lee County Economic Development Group Tuesday.
Fort Madison City Manager David Varley put the issue on the agenda of Tuesday’s regular City Council meeting and recommended that the city make a contribution to the LCEDG, but left it to the council to determine what amount was appropriate.
In a memo to the city council last week, Varley wrote that the city had a three-year commitment that ended in June. He recommended that the city make a contribution to the LCEDG, but said revenues are about $800,000 less than when the commitment was made and the city has to be responsible to it’s citizens in setting the contribution.
The issue was eventually tabled on a motion by Councilman Chris Greenwald who said he’d like to have conversations with city staff to find where the city might find some money.
“There’s some things that we fund that I think aren’t as important as this,” Greenwald said. “I’d like to table this because I don’t want to spring this on David now. I want to give him my thoughts on perhaps things that we’re supporting that aren’t as important.”
Greenwald also encouraged other councilman to look at options the city’s funding that are less important than economic development.
LCEDG CEO Joe Steil said it was his understanding that the city’s commitment to LCEDG was a five-year commitment that began in 2014-15, which would leave one more year on the commitment. The city committed to $50,000 per year, but when the revenues from the riverboat casinos dried up at the end of the 2017 fiscal year, the city decided to cut their contributions back to $25,000 the following year.
Steil said he would like the city to eventually return to it’s original commitment of the $50,000, but understood that budgets can be confining and governmental agencies have to look at things annually.
Varley said his records indicated the city’s commitment was for three years and the city’s revenue picture is not as robust as it was when the original commitment was made.
The LCEDG is also finalizing plans on its next five-year public-private partnership campaign to extend funding through fiscal year 2023. That campaign kicks off in September.
“After hearing you speak, I almost feel like you’re on the attack here,” Greenwald said. “When you say “We’re doing a great job’ – well if you’re doing such a great job then my tax base is growing and I’ve got no problem. But when you do a good job what you do is you hook ’em, and then you get them to us and we have to incentive the heck out of it,” Greenwald said.
Greenwald said the city’s gone through $2 million over the past two years in expansion incentives and maybe the city should be looking closer at those investments.
“I feel like I haven’t been listening to David Varley like I should have been listening to David Varley,” he said.
Steil said it was not his intention to make the council feel attacked.
“In no way shape or form is this to be an attack and I’m sorry if you misinterpreted that,” Steil said. “We’re all about expansion and those companies are here and we want to make sure we are there for them when they are talking about expansion. We do need to take care of those businesses because they are committed. When we get somebody new that’s the glitzy stuff.”
Mayor Brad Randolph said economic development has value and the city doesn’t have the capabilities that the LCEDG has in order to sustain and improve the workforce.
“The question is at what value is that, No. 1. And the question before that is can we afford it,” Randolph said.
Varley told Steil that the city is down about $834,000 less than when riverboat revenues were coming in.
“We were getting about $300,000 a year from the riverboat and when that floated away 100% of that money floated away with it. We were giving you $50,000 but we’re $834,000 lower in revenues now then we were then,” Varley said. “You say you’d like to go back to that same level – well we’ve got city departments that would like to go back to that level as well.”
Varley told Steil he couldn’t see telling city departments to cut their budgets back so the city could increase their commitment to LCEDG.
“I’m a little offended that you want $50,000 a year over five years and we’re down $800,000. We don’t have that ability. That doesn’t seem to effect you,” Varley said.
Dennis Fraise, LCEDG COO said LCEDG officials would be willing to sit with city officials on a more regular basis and let them see the group’s budgets in order to increase transparency between the two groups. Fraise also spoke about the group’s efforts to create a better workforce saying that many industries in the county are poised for growth, but are concerned about a sustainable workforce. He cited state and national awards the LCEDG has received in the past two years because of their focus on programming for workforce development.
LCEDG gets 51% of its funding from the county, which according to Steil is approximately $210,000 per year. The rest of it’s revenue comes from contributions from private industry and contributions from the cities of Fort Madison and Keokuk. Fort Madison makes its contribution directly, however, Keokuk’s contribution comes via the Keokuk Economic Development Corp. as a pass through from a check from the city.
Varley said he would put the issue back on the agenda for the next city council meeting.