Thursday's decision by the Leavenworth County Commission to keep the whole of the would-be budget request for the county's two economic development bodies into one of the county's own reserve funds means two of largest entities funding one of those groups, the Leavenworth County Development Corporation, have now backed out of their support of the organization in the course of two weeks.
According to LCDC Executive Director Steve Jack, the city of Leavenworth and Leavenworth County together made up more than two-thirds of the annual budget for LCDC ― about $200,000 of $270,000 each year. The organization formed in 1982 as Leavenworth Area Development, a group devoted to marketing the county for the recruitment and retention of businesses and capital investment in the county. Because the county was the sole funder of LCDC's companion organization and the other countywide economic development group, the Leavenworth County Port Authority, that organization will lose all of its funding for the year.
On Friday morning, the executive director of LCDC, Steve Jack, said the group's executive committee met for a meeting to discuss the path forward in light of the decisions by the city and county. A number of questions emerged for later discussion ― including board makeup, participation of the city and county and future staffing capacity for LCDC, given Economic Development Coordinator Cecilia Harry's announcement that she would be departing at the end of August.
“All these are questions that we will at least start discussing,” at the next meeting of the full LCDC board Aug. 8, Jack said. “It is our interest to keep our organization together.”
The two entities cited different reasons for pulling their support ― for the Leavenworth City Commission, the decision came as part of a package of $300,000 in budget cuts identified to ensure that the city would not have to raise its property taxes.
“I will not vote for a mill increase of any kind,” Mayor Pro Tem Mark Preisinger said at a meeting this month, though he added he supported the mission of the group.
County commissioners, in making their decision Thursday, said the matter was one of oversight of the group's activities. Their plan was to move the money requested by LCDC and LCPA into the county's own capital reserve account, meaning no funding for LCDC and availability for LCPA to incentivize economic development projects on a case-by-case basis only.
“We have the money there and we have some control over how they spend the county's money,” under the new proposal, Holland said.
But make no mistake, Leavenworth County Administrator Pat Hurley said, the allocation is not earmarked for either organization.
And, according to Holland, nothing precludes the county from using that allocation for their own priorities.
Page 2 of 2 - “If we get to the end of the year and they have no one in mind for this money, then we can go out and use it on our roads,” or for another purpose, he said.
Commissioner Dennis Bixby said he hopes the decision by the county spurs some discussion within the ranks of the LCPA and LCDC.
“This will be a chance, I think, for both organizations who work very closely together to look for other ways to economize, work together,” he said, later adding “I think there could be some good changes come about because of this.”
Jack admitted the relationship that serves as the foundation of LCDC ― a partnership between the different municipalities and private industry ― can be fragile, and it's not the first time local governments have asked for changes at LCDC using their budget allocations as leverage. In 2009, the city of Leavenworth withheld the group's request because of concerns over how LCDC communicated with the various stakeholders about its goals and progress.
“The difference was the money was sitting aside waiting to be spent on LCDC or not spent on LCDC,” and not cut outright, Jack said.
But in light of that, he said the LCDC board developed a program of work scorecard that gave the staff of three measurable goals against which they were judged. It was a change in communication style based on feedback from one of the stakeholders, a change that Jack said was a positive one for building trust between LCDC and its stakeholders. In this case, Jack said he that the city or the county planned to pull funding initially took him by surprise.
In the recent budget talks, Jack said both the city and county urged LCDC to draw down its reserve funds for operational expenses, reserve funds that he said were built up at the suggestion of the businessmen and women who also serve on the board of directors that LCDC and LCPA might need in case of a “rainy day.” It appears the city and county have brought that rainy day, he said, and that lack of certainty for funding in future budget years makes planning too far in advance difficult.
With the three other communities who contribute to LCDC ― Lansing, Basehor and Tonganoxie, all of whom pay smaller allocations based on the group's population and valuation-based funding formula ― Jack said support appears to remain strong.
And despite the uncertainty, Jack said he does not anticipate the changes affecting the day-to-day operations of LCDC for now.
“Our responsibility is to keep the organization alive, viable, healthy and aggressively pursuing business opportunities,” he said. “If we do that, and we work hard and smart, we'll get results.”