City foregoes final payment to LCEDG


FORT MADISON – The Lee County Economic Development Group will be going without a contribution from the City of Fort Madison this year.

At Tuesday’s regular city council meeting, the council voted unanimously to not make a contribution to the LCEDG, which would have been the final payment of a five-year pledge to the group. But the vote also included a renewed pledge starting in the next fiscal year at $25,000 per year if the city budget holds up.

Despite most of the council voicing support for the efforts of the LCEDG and the bang they get for their buck, the council wasn’t willing to sacrifice potential cuts to city programs over the contribution. Councilman Chad Cangas even called the financial support to the group “crumbs” compared to other larger riskier investments like the proposed Amtrak depot.


Councilman Matt Mohrfeld made a motion for the council to make a commitment, based on a yearly review of city finances, of $25,000 per year through 2023, which is the current five-year campaign underway by LCEDG.

Dennis Fraise, the COO of the economic development group, talked to the council again about the strides being made and the reputation the LCEDG is garnering around the state and country. However, he stopped short of asking the city to continue the contributions only saying LCEDG appreciates the opportunity to work with the city and will continue to update the city on LCEDG efforts and information.

At a meeting last month, the conversation got a bit heated when LCEDG CEO Joe Steil tried to clear up what he termed some misunderstandings in the commitment the city had made for five years. City officials were unclear as to the number of years in the commitment and didn’t budget for a 2018 fiscal year contribution. City Manager David Varley told Steil he was being irresponsible asking the city to not consider its financial condition and turn over the money.

Mayor Brad Randolph said Tuesday not budgeting for the final year was an oversight. The city did give LCEDG $50,000 per year from 2014-2016 and then pared that back to $25,000 in 2017 due to tightening budget concerns.

The LCEDG gets its funding from a private/public partnership with funds coming from private industry and businesses in the county and also from contributions from Lee County, the City of Fort Madison, and the City of Keokuk.

“When Gov. Reynolds goes out and talks about the state, about workforce development, she mentions Grow Lee by name,” Fraise told the council. “We’ve built a great reputation and that’s due to the investors we’ve had.”

He said Fort Madison is a vital partner in the success of the economic development efforts in the county.

“We love the idea of collaboration with you guys and one of the things that came up last time was attending your work sessions. We think that’s a great idea. Sometimes we get busy and we forget to do this, and show up and tell you what we’re doing and we’re responsible for that and we will be doing a better job of that in the future.”


Fraise said after the meeting that LCEDG has tried hard to work within their means and even though the contributions are an integral part of their funding source, the group will be able to manage the missing contribution.

Councilman Matt Mohrfeld said budgeting is about prioritizing.

“When we look at just some real simple return on investment, they’re putting 60% of the heads in beds in our hotels. They drive our budget and that’s straight return on investment,” Mohrfeld said.

“And let me put some things in perspective. We give them $25,000 to do what they do for Lee County. We spend on the person managing our tourism budget, that’s $45,000. Old Fort we spend $90,000. The swimming pool, and I love the swimming pool, but we spend $100,000 on the pool. If we can partner with someone instead of creating the wheel, that is a tremendous return on our investment.”

Councilman Chris Greenwald said the contribution to the LCEDG and the new Amtrak depot are both issues of growth and he said the city needed to go back and prioritize.

“I think we have to go back through and prioritize and see where our best investments are. When money gets tight, it doesn’t mean you just say no to everything, it means you go back through and find where your priorities lie and you’ll get the best return.”

Randolph said, “To be able to spend whatever amount of money we decide, we could not do that on our own. To be able to take a small amount of money and poney with other amounts of money and get the horsepower we get out of Lee County Economic Development becomes critical to the long-term success of the county.”

Councilman Kevin Rink said Varley outlined 12 different programs that could be reduced to provide the $25,000 per year.

“I don’t want to sound like I’m negative against it, but I’m reasonably comfortable with the funds that we’ve all discussed, but where do we find this money. We’re sure it’s there, we’ve found money before.”

Councilman Bob Morawitz said he wasn’t as confident the revenues would be there.

“I’d love to give them the $50,000 per year or more because it’s needed, but you have to take care your own family first. Public safety is our number one issue and I don’t want to cut anything out of there,” he said.

Mike Mohrfeld, of Mohrfeld Electric and Green Oak Development, sits on the LCEDG board of directors and said Green Oak development was born out of the Iowa Fertilizer Company announcement.

“Working behind the scenes with this group they are on the right track. ROI on a $25,000 investment, I think it’s our job to come back to you in six months, 12 months, and show you what that ROI looks like, but I can assure it’s going to be there in a fiscal sense,” Mohrfeld said.


Councilman Chad Cangas said he’d like to see where we get it.

“What I’m hearing right now is every dollar we put somewhere comes from somewhere else because we don’t have extra. So I’d like to see hard numbers of where we get it?”

Rusty Andrews said he was happy with the discussion on the issue.

“We’re talking about $25,000 and we’ve seen a lot bigger issues come across the council that we voted and approved and we didn’t know where it was going to come from. This was a great discussion and it needs to happen more often and make sure these things are solved at budget, but I don’t know how we solve it.”

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