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Economic council budget may get slashed in half

JEDC says it's being targeted unfairly

Posted: Friday, March 03, 2000

With Executive Director Charlie Northrip gone, the Juneau Economic Development Council is being escorted to the plank by cash-strapped city leaders.

Mayor Dennis Egan and Juneau Assembly member Dwight Perkins say a proposed 50 percent cut in the municipal grant to JEDC, followed by a complete phase-out in a year, wouldn't kill the business-assistance organization.

And Kirk Flanders, acting director of the private nonprofit group, says he would indeed fight hard to find private foundation funding to keep his programs alive.

But the severity of the proposed city action - especially when compared to other assembly grant proposals now on the table - has strained the relationship between the two bodies.

When city Finance Director Craig Duncan attended a JEDC board meeting Thursday, the only point of agreement was that Northrip, now on a one-year leave of absence in Croatia, was a smooth talker when it came to massaging the assembly.

The JEDC, which uses the municipal grant to seed its programs for business counseling and technical assistance throughout Southeast, had been cut from $150,000 to $125,000 for this fiscal year. But by all accounts, Northrip staved off steeper cuts before that.

``Charlie was really good at selling things to the assembly, and they're a little gunshy from that, I think,'' Duncan said.

Now, in the first draft of budget repairs intended to cover a $4 million hole in revenue, the city proposes to trim the annual JEDC grant to $62,500 for the fiscal year beginning July 1.

Perkins, who is also a member of the JEDC board, said it's his intention to go to zero a year later.

``They've got to get out there on their own,'' he said today. ``It's been a heck of a ride. But we don't have funds for that kind of thing anymore. . . . This has become a luxury.''

``Personally, I think the JEDC does a great job,'' Mayor Egan said. ``I think Kirk Flanders is doing a great job, and he had big shoes to fill. . . . It's just budget crunch stuff.''

But Duncan implied at Thursday's meeting that the proposed cut was partly related to JEDC's performance.

He said he's not sure the organization has complied with all procedures under a grant to establish JEDC's revolving loan fund for business assistance, and he asked for an audit.

Flanders said JEDC has been ``singled out'' for extinction.

He noted that the initial budget proposal does not contain similarly steep cuts for other city grantees.

Grants to Independence Day committees in Juneau and Douglas would go untouched; an arts and humanities grant would be cut by about 5 percent, from $59,500 to $56,500; and Perseverance Theatre would see an equivalent dip, from $23,500 to $22,300, according to Duncan.

The JEDC board voted to officially request $118,750 from the city for the next fiscal year, which also would be a 5 percent cut.

While Duncan said that continuing JEDC's current grant would require laying off a police officer or firefighter, the JEDC board said the more appropriate comparison is between grantees.

Perkins said: ``If they want to beat up on the kids and take the kids' money away for arts and humanities, then let them do it. . . . When did the JEDC start becoming an entitlement?''

Flanders said he had no problem with an audit of the revolving loan fund. ``I'm hopeful that the audit will rebuild some trust.''

As for the tight municipal budget, JEDC staffer and former board member Deborah Marshall said the city should be constantly reminded of its numerous sales-tax exemptions as the budgeting process proceeds.

Flanders said that cutting economic development in a time of declining city revenues is exactly the wrong approach, as the JEDC leverages $7 from other funding sources for every $1 of city contribution. ``I defy any other organization to do that,'' he said.

The JEDC used its $125,000 grant to attract total revenues of more than $900,000 in 1999, according to its annual report.

Flanders vowed not to let the organization go under.

``We're not going anywhere,'' he said. ``I'm going to go scramble and replace those funds, if there's any way I can do it.''

Flanders said JEDC also will try to document for city officials how its grant attracts other funding and how the Southeast economy benefits from its efforts.

``I'm looking for fairness,'' he said following Thursday's meeting. ``It did feel like a direct assault on us.''



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