PORT ANGELES — City officials are considering a new way to fund economic development groups, which received a total of $409,000 from city coffers in 2013.
“City Council very much wants to see performance objectives with any funding that they’re providing to the various economic development and tourism-related activities,” Port Angeles City Manager Dan McKeen said Friday.
“And a lot of people feel we need to re-examine all the different agencies involved in those activities.”
The city has historically contracted with three groups for economic development and promoting tourism: the Port Angeles Regional Chamber of Commerce, the Port Angeles Downtown Association and the Clallam County Economic Development Council.
For 2013, the city budgeted $309,000 for the Chamber of Commerce, $85,000 for the downtown association and $15,000 for the Economic Development Council.
Staff explained proposed changes as City Council members and staff discussed the city’s 2014 preliminary budget Tuesday.
Council members are expected to hold the last of two public hearings prior to a vote on the city’s proposed $129 million city budget, containing a $19.1 million general fund, at their Dec. 3 regular meeting.
“I think the first step that we need to take, this council needs to have a discussion on what are our expectations for these particular groups,” Councilman Dan Di Guilio said at the Tuesday council meeting.
Councilman Patrick Downie said some residents have suggested the council re-examine the way the city funds economic development.
“There seems to be a growing concern among civic and community leadership to have us do what we’re proposing to do,” Downie said.
“It’s nice to be ahead of the curve for once.”
The proposed changes, which would take affect in 2014, include $20,000 less than in 2013 for the Port Angeles Downtown Association.
McKeen said city finance staff are still working to see if this $20,000 could be replaced through a state business and operations tax credit program for either 2014 or 2015.
The $65,000 collected from the downtown businesses through the city’s Parking Business Improvement Area and paid by the city to the downtown association would not be affected, McKeen said.
Bob Lumens, president of the downtown association, said $20,000 less from the city next year would mean the association’s various committees would have less money to plan promotional events for the downtown.
“It’s definitely going to affect us,” Lumens said.
Money is typically spent, for example, on organizing the tree-lighting ceremony at the Conrad Dyar Memorial Fountain and planning various programs and promotions that involve multiple downtown businesses.
“Those are the kinds of promotions we produce to get people downtown,” Lumens said.
Lumens said he would have no problem with city funding tied to the downtown association completing certain tasks, though the association does provide quarterly progress reports to the city.
“The contract calls for a number of things to happen and they do,” Lumens said.
“And we’ve always been right on target as far as that goes.”
Lumens said, however, these discussions with city officials have sparked similar conversations within the downtown association’s committees.
“I think within our mission there are certainly things we can do better,” Lumens said.
Another proposed change would withhold or “sequester” $189,500 of a total $309,000 planned for the Port Angeles Regional Chamber of Commerce until the chamber delivers a marketing plan for 2014.
The marketing plan would be reviewed by the city’s Lodging Tax Advisory Committee and the City Council would approve it before the money is paid to the chamber.
Nathan West, the city’s community and economic development director, said this “sequester” would not impact funding to the chamber’s Port Angeles Visitors Center or the events the chamber organizes.
“The chamber is prepared for whatever we’re asked to do,” said Russ Veenema, chamber executive director.
“We are a contract agency with the city and the [Lodging Tax] Committee, and it’s our responsibility to make sure both entities are comfortable the money’s being spent properly.”
McKeen did not make a specific recommendation regarding changes to the city’s contract with the Economic Development Council, an agreement that expires at the end of this year.
“The council would need to make a decision whether they want to take $15,000 out of the [city’s] economic development fund to commit to fund the EDC [in 2014],” McKeen said.
Linda Rotmark, executive director of the Economic Development Council, declined to comment Friday on the status of contract talks between the city and development council.
“I do not feel comfortable at this time commenting on this,” she said.
City Council member discussion on this topic started in earnest at a Nov. 12 budget work session.
Councilwoman Sissi Bruch said she would like to see the $409,000 the city has paid to these economic development groups diverted to other city responsibilities, such as improving Civic Field at Third and Race streets.
“I think there’s a need to shake that [funding situation] up a little bit,” Bruch said.
She made it clear, however, that certain tourism-related programs should not be touched, such as the Juan De Fuca Festival of the Arts in May and the Dungeness Crab & Seafood Festival in October.
“These are all jewels,” Bruch said.
“I do believe that we do need to keep supporting the things that keep people here.”
Council members generally did not want to do away with all funding, though did support re-examining the economic development contracts.
“It’s time to re-look at this for the community,” Mayor Cherie Kidd said at the work session.
“We have to be careful we don’t make any moves without understanding the consequences.”
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Reporter Jeremy Schwartz can be reached at 360-452-2345, ext. 5074, or at jschwartz@peninsuladailynews.com.