Stumbling blocks slow funding for economic group

Some funders a little leery

The Economic Development Council (EDC) has been making the rounds in search of funding for its first year of operation. Members of the EDC have been appearing before the Board of County Commissioners, the town of Mt. Crested Butte and the city of Gunnison to request financial participation from governments and business alike.

So far, the EDC has met with mixed results, with financial backing coming more readily from the south end of the valley. But County Commissioner Paula Swenson, who spearheaded the development of the EDC, feels confident the group will raise at least 70 percent of its $100,000 goal. And even before funding is solidified, the EDC is moving forward with the development of a broadband subcommittee and a partnership with Western State College.
On October 18, both the Board of County Commissioners and the city of Gunnison expressed support for the EDC, which has been meeting since March to develop a valley-wide economic development plan. The proposed 2012 budget for Gunnison County includes $30,000 for economic development, and according to Swenson, the city of Gunnison is planning to contribute $25,000 through a combination of an increase to the city’s sales tax and a direct contribution from the city itself.
But elsewhere, funding has not come as quickly. The town of Crested Butte is waiting until after its November 1 election to consider the EDC’s funding request, and at an October 18 meeting the town of Mt. Crested Butte declined the EDC’s request that it increase its Business and Occupational License Tax (BOLT) by $20.
The council did not make a decision on the additional request for a $5,000 contribution from the town government itself. They will consider that November 1.
Councilman Chris Morgan said, “In 2002, when we put the [Tourism Association] tax up, the plan was to merge the chambers of commerce and have the Tourism Association come up underneath it so we could accomplish exactly what you’re talking about. Now the Tourism Association is generating between $600,000 and $700,000 a year. Why don’t they take care of it?”
 The EDC had also hoped to capture part of the county vendor fee. Businesses collecting county sales taxes collect 1 percent for the county and then deduct 3.33 percent of that 1 percent on their sales tax return; the EDC proposed reducing that deduction to 2.33 percent and contributing the difference to their efforts.
But at the October 18 meeting of the Board of County Commissioners, county manager Matthew Birnie reminded the commissioners that there are restrictions placed on county sales taxes.
“That one’s kind of tough for us for all the reasons we’ve talked about, including the restrictions on the use of sales tax,” Birnie said.
Those funds are shared with the municipalities of Gunnison, Crested Butte and Mt. Crested Butte. The county would need to sign an intergovernmental agreement with each town to ensure their portions were contributed to economic development; even then the county portion is restricted to capital spending. Birnie questioned the effort for what would likely amount to $20,000.
“The more straightforward thing would be a county business license, but I don’t know that we have authority to do that,” Birnie said.
“I really think right now we can put the vendor fee portion on hold… If we can keep [the county contribution] at $30,000 to cover some of that vendor fee portion, we can see where we come in with the municipalities and then maybe look at some other avenues to catch these other people—because the vendor fee is so convoluted for us, … we’re going to spend more than $20,000 trying to find $20,000,” Swenson responded.
Part of the challenge seems to stem from confusion over what the EDC funding will be used for. At the October 18 meeting, three members of the public showed up after the commissioners had finished discussing funding—a discussion they began before the scheduled time on the agenda—to learn just that.
According to Swenson, the EDC has six specific goals, including the development of an overarching marketing plan for Gunnison Valley, developing a new web site where that story can be told cohesively, assessing and eliminating red tape among the various regulating agencies, and improving broadband within the valley.
The EDC has already taken steps toward some of these goals by establishing a subcommittee to tackle broadband needs in Gunnison valley. A dozen IT experts from across the valley will assess broadband needs across the valley and implement a plan to meet those needs. According to Swenson, the potential availability of federal funding makes timing fortuitous.
Gunnison Country Chamber of Commerce executive director Tammy Scott has also set up a partnership with Western State College, where marketing classes will assess the valley’s regulatory agencies for red tape and develop a new marketing and web site plan. The latter, Swenson hopes, will bring together what she calls the silos within the community.
“Everyone of them tells a little bit of our story, but collectively we really have a great story to tell and hopefully we can start pulling that together,” Swenson said.
She referenced a similar web site developed by Montrose to the tune of $40,000—and that’s exactly the type of project that EDC funding would go to.
 “The way we’ve set it up, we’re not spending money on a person, we’re spending money on projects and I think that’s going to make a big difference with the community as we move that forward,” Swenson said.
The goal is to house economic development efforts within existing community assets. The EDC will continue to be spearheaded by a group of volunteers under the umbrella of the Chambers of Commerce: four members from the north end of the valley and four from the south. But even though it’s volunteer-based, participants will go through a formal application process.
“We’re asking for a minimum of five hours a week, and they either own a business, have owned a business, have a background in economic development… that they understand the efforts and what we’re doing, that it’s a community effort and not a take your own idea and run with it,” Swenson said.
Swenson knows that establishing the council and its structure at the same time it seeks funding does add some challenges to the process.
“I know with our different funders like the towns and the county, they’re a little leery when it comes to talking about funding when we don’t actually have the organization or our whole game plan put together. But when we tell them what things we are doing, they are getting involved and the funding pieces will come together. I don’t know if we’ll get across the finish line for all of our funding pieces for 2012,” Swenson said.
But she believes that as projects come forward, community funding will fall in line. But what remains to be seen is whether the reluctance of communities like Mt. Crested Butte could impact overall funding. Commissioner Hap Channell has been quite vocal about seeking assurances that the county will not be the only entity to fund the EDC.
“I would like some contingencies,” he said. “I’m not sure what that would be, but I don’t want us to crawl out on that limb by ourselves and if other pieces from the business community [don’t come in], then we’re going to be all by ourselves,” Channell said. But Birnie assured him that conditions could be included with a contribution.
“We’re going to have to enter into a contract with [the EDC] before we fund them and that’s where conditions would live—if this, then that, a payment schedule… that would be in a contract,” Birnie said.
In the meantime, Swenson hopes that measurable results—like increasing access to broadband or increasing visits to a valley-wide web site—will speak for the EDC.
“We started with a larger group that are the driving factors, and the working group will have to come back every six months and check in. And I think by not creating yet another independent entity, its own 501c3 nonprofit status but keeping it under the umbrella of the chambers right now, we’re going to be more accountable to the community.”