Assembly may soften budget blow to JEDC

Finance chairman agrees to reconsider depth of funding cuts

Posted: Tuesday, April 18, 2000

Tension between city officials and the Juneau Economic Development Council eased somewhat Monday, as Juneau Assembly Finance Chairman Dwight Perkins conceded that his proposal to cut JEDC's city grant by 50 percent might be too aggressive.

Perkins and the JEDC board had an amicable discussion about the future of the city-backed business-assistance organization, although they continued to disagree about its ultimate fate.

Perkins said the city, facing a revenue shortfall, is in a period of ever-diminishing financial resources and eventually needs to wean the JEDC off municipal funding. Board members and staff of the nonprofit agency argued that they have plenty of evidence to document their success in fostering business growth and saving jobs in Juneau and Southeast.

The issue will come to a head May 10, when the JEDC makes its pitch to the assembly for a grant of $118,750 in the fiscal year beginning July 1. Perkins has proposed to lower the grant level from this year's $125,000 to $62,500 - and then to zero a year later.

Perkins, who traded some barbs with JEDC Acting Director Kirk Flanders over the past month, came to the group's board meeting with a conciliatory tone.

``I'm sorry it's played out the way it has,'' he said. ``It was strictly a dollars-and-cents issue. . . . The last thing I want to do is put you guys in a tailspin. It may be that it (a 50 percent cut) is too darned aggressive this year.''

Perkins said he's open to arguments that such a steep cut so soon would have a crippling effect on JEDC operations because city funds are used to match other grants.

``I think we heard today a reprieve from a bullet to the head,'' JEDC board member Paul Voelckers said after Perkins left.

Board member Craig Dahl, a banker, said the structure of JEDC is ``a very common and sound format for economic development.''

``The marketing of Juneau is the responsibility of Juneau,'' Dahl said. ``If it's not the city, who is it? If you don't have `come here, come here,' all you're going to see is `go there, go there.' ''

The board directed Flanders - who had been pondering a transition plan to take JEDC completely private - to fight for continued city funding.

``I think you need to be careful you don't acquiesce too quickly,'' Dahl said. ``Maybe we need to do a better political job.''

And board members were still smarting over city Finance Director Craig Duncan's suggestion that JEDC performance was at issue.

``That sounded more like a vendetta than a business decision,'' Dahl said.

An audit of the JEDC's revolving loan fund requested by Duncan did turn up three areas in which the organization didn't comply with assembly guidelines. The auditor, Max Mertz of Elgee, Rehfeld & Funk, said he didn't view the technical paperwork violations as reflecting any procedural problems in administering the fund, however.

And Flanders said that one of the errors occurred because Duncan refused to accept JEDC's wording for a document and substituted his own, omitting a key phrase regarding collateral. Dahl said Duncan committed ``an egotistical faux pas'' by not consulting the city attorney.

Duncan declined to comment today on JEDC board and staff statements.

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