MONTROSE – Montrose City Council is changing the way it finances the Montrose Economic Development Corporation. The council decided at its Oct. 7 meeting not to renew its $80,000 budgeted annual contract with MEDC in 2011, and to allocate money to the organization on a piecemeal basis, instead.
Council also is delaying quarterly payments of $20,000 to the MEDC under its current contract until certain reporting conditions are met, said Councilmember Bill Patterson, who believes MEDC has not done its job.
“My position is that MEDC has been what I consider relatively ineffective in what it’s doing,” he said. “The money given to MEDC basically goes to support the organization.”
Instead of giving the money to the economic development group, Patterson said, council decided to set aside $80,000, earmarked for economic development, which MEDC can apply for as needs arise.
But Patterson said that money should not go to overhead or administrative costs.
“Part of my concern is that there didn’t seem to be any accountability” from MEDC, he said. “If a company [recruited by MEDC] says it’s going to provide 50 jobs, there’s no follow-up” to ensure they have done that.
Before the city releases a $20,000 quarterly payment, council wants MEDC to provide information in several areas, Patterson said.
“We want them to provide information on various loans that are out there, and their job performance, and to also have a current check of where all these companies are as far as employees,” he said. “We want them to show us how this [number of jobs generated] was audited, how do they check that, and who does that.”
Patterson also wants to an explanation as to why MEDC Director Sandy Head donated money to the campaign of Ray Rose, who lost his city council election bid to Patterson.
“She also listed her employer as Western Skyways, and I’d like an explanation as to why this was not a conflict of interest,” he said.
Western Skyways is owned by Sandy Head’s husband, Al Head, who, along with JetAway Aviation, was reportedly behind an effort to recall Patterson two years ago, when Patterson was a Montrose County Commissioner.
“Sandy Head makes over $100,000 a year, and I can see why we’re reluctant to keep funding when we get nothing,” Patterson said.
Although the council agreed to restructure MEDC’s funding, Councilmember Carol McDermott disagreed as to the reason for it.
“I think it’s very important that MEDC maintains its position as primary recruiter for jobs in our community, responsible for acquiring space – land acquisition – and answering queries,” she said. “The change in the format in funding is to go along with our campaign promises regarding accountability and transparency.”
Although MEDC will have access to $80,000 for economic development, with no contract in place, it must justify each request for city funds, McDermott said.
“It cannot be spent on things like dinners, and we want those tax dollars to support land purchases and attendance at conferences where contacts can be made,” she said. “We need to know where the tax money is going…making sure our citizen tax dollars are going for something solid.”
McDermott said the city also allocates funds to Region 10 League for Economic Assistance and Planning and to the Montrose Association of Commerce and Tourism, both under contract, and the same kind of reporting and transparency will likely be required of them.
Councilmember Gail Marvel said she also supports MEDC, but that a “small group of people” has been writing letters and emails to council members demanding that the city stop its MEDC funding altogether.
“They are saying do not fund MEDC, but MEDC has done everything the city asked them to do, by contract,” she observed. “So the past issue airport issue [with JetAway Aviation] is a county issue, not a city issue.
“It’s a political thing,” Marvel emphasized, referring not only to the attempted recall of Patterson, but also to JetAway’s ongoing court fights with the county when it lost its a bid in 2005 to provide private jet services at the airport to another company.
“I think MEDC has been diligent with taxpayer funds and done exactly what we asked them to do under contract,” she said.
In discussing the 2011 budget, at first the council wanted to cut funding to MEDC in half, to $40,000 per year, but agreed instead to keep the $80,000 figure for economic development – without a contract, said Mayor Kathy Ellis.
“Instead of giving it, we would retain the money and MEDC would come to us with projects, and we felt like that was a good solution,” she said. “Some people are diametrically opposed to giving them money, but how do we support jobs and support businesses?”
Ellis said the discussion on MEDC was prompted by complaints from citizens.
“Quite a few of us on council received phone calls and emails requesting we do not give MEDC more money, and I brought it up so we could have more discussions in public,” she said.
As a result, MEDC Board President Ron Courtney came to last week’s meeting and gave an impromptu presentation and answered questions.
Another council concern: MEDC pays $2,000 in rent, which could be reduced if they relocated elsewhere, Ellis said. Courtney was not aware of the rent issue, but promised to look into it, she said.
The city is not MEDC’s only source of funding, Marvel said; the agency has 137 business investors and pledges of more than $2.5 million.
“We have businesspeople who support the organization – people who are giving them money – and to me, that’s a huge part of the community, compared to a handful of people who want to see MEDC thrown under the bus.”
Courtney voiced concern that council’s decision to change the MEDC funding structure is a result of “some possible political undertones” and misunderstandings.
“In the end, it’s a community thing,” he said, of MEDC’s function, “and either we are all working on it or it won’t work,” he said. “I don’t think this is the end of how it’s all done; every year is a new year. There are some bold ideas circulating in the community, but some people are not interested in the truth.”
The truth, he said, is that while the city is only one of the investors in MEDC, all funding must be on board for it to succeed.
“We need everyone in order to obtain the goals we set,” he said, adding that the council’s decision was “more form than substance.
“We have always done very well with the city, and the city has always been very good about working with us, and we don’t expect that to change,” he said.
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