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Budget cut an economical decision?

Borough: Demise of Community and Economic Development District won’t be traumatic

Posted: Friday, February 17, 2006

Facing serious revenue shortfalls, Mayor John Williams’ administration took several steps upon assuming office in November 2005 to stop the flow of red ink.

One was to eliminate the Kenai Peninsula Borough’s Community and Economic Development Division, or CEDD, and terminate the position of its director. It is estimated the move will produce budget savings of about $210,000 from now through the end of fiscal year 2007, which ends June 30, 2007.

Established in 2000 during Mayor Dale Bagley’s administration, the CEDD’s prime focus was attracting new businesses to the peninsula and clearing obstacles from their paths to profit. Its aim was boosting economic opportunities and improving the quality of life on the peninsula through job creation and development of new business opportunities, and economic research and analysis. Its offices were in the Red Diamond Center.

Today, those functions are centered in the Borough Building, including economic analysis and the borough’s liaison to the oil and gas industry. While Jeanne Camp’s job as economic analyst has remained roughly the same, the liaison position held by Bill Popp, which over time expanded within CEDD, most notably in relation to the Arctic Winter Games and the Pebble Mine project, continues to expand under the new administration.

“We haven’t heard of any impact to the community” in relation to the demise of the CEDD, said Tim Navarre, chief of staff to Mayor Williams.

It is likely too early to tell whether other effects of the division’s closure will ultimately outweigh the savings, he said. But the fact is most of the CEDD’s functions still exist in other parts of the administration. Indeed, said Navarre, the administration has “broad knowledge” of the things CEDD was doing on behalf of business and still offers many its services.

“The help is still out there and the information available at CEDD is still being produced,” Navarre said.

The need for the CEDD had always been a matter of debate. Critics pointed out that a separate entity — the Kenai Peninsula Borough Economic Development District Inc. (KPBEDD or EDD for short), which is funded through borough, state and federal sources — offers similar business development resources, and thus the CEDD amounted to a duplication of services.

With the termination of the CEDD, the EDD “probably has picked up some of the slack,” Navarre said. “It is a role they were already doing and assisting in.”

Meanwhile, the Small Business Development Center, the partnership between the University of Alaska and the U.S. Small Business Administration that was housed with the CEDD, remains active at the Red Diamond Center, along with its resource library.

Business promoters with new ideas often sought out and used the expertise of the CEDD to advance proposed commercial developments. The CEDD often could answer the “Who do I talk to?” question.

“Those things are still happening,” Navarre said. “We are still assisting new business.”

For the entrepreneur seeking a repository of information and perhaps some direction, the closure of CEDD may mean having to do a little more of the legwork or path clearing that CEDD occasionally could provide.

Navarre said the administration has not yet fully assessed the accomplishments of the CEDD during its existence, but clearly there are some, he said. The effort to promote the quality of Cook Inlet salmon through fish branding and marketing is one.

“You would have to argue that even though Kenai Wild (Cook Inlet Salmon Brand Inc.) is going through some adjustments, by focusing on the branding issue, the Kenai Peninsula Borough helped enhance the price of fish,” he said, pointing to grant money funneled through CEDD to cover equipment and other costs.

Leon Marcinkowski, president of Cook Inlet Salmon Brand Inc., said little has changed for the organization since the demise of CEDD, except that they moved from the same Red Diamond Center building to a new location on the Kenai Spur Highway at the EDD offices.

He said Kenai Wild’s new executive director, Kay Shearer, has only recently met with Williams and talked about the company’s marketing efforts.

“Financially, we probably won’t get any borough money because of their financial difficulties, but Williams told her that they will support us in any way they can,” Marcinkow-ski said.

During his tenure with CEDD as the borough liaison to the oil and gas industry, Bill Popp also took on promoting the Arctic Winter Games, which begin in March. Now that Popp is working out of the Borough Building, his job is taking on new functions all the time, including aiding Mayor Williams in the efforts of the new Tri-Borough Commission for Regional Cooperation and Economic Development and the Peninsula Conference of Mayors, Navarre said.

Former Mayor Bagley said in late January that the break up of CEDD really amounted to “a nonissue,” because most of its functions still exist and most of its employees remain on the job. All that really went away was business manager Jack Brown’s job. Bagley said.

Overall, Bagley had little comment about the CEDD decision.

“It’s just the way he (Williams) wants to do business,” he said.

Top 10 sales taxpayers

The following are the top 10 sales tax contributors to the Kenai Peninsula Borough in fiscal years 2004 and 2005. Fiscal years run July 1 through June 30.

Borough FY2005

1. Fred Meyer Inc.

2. Homer Electric Association

3. Safeway Inc. — Kenai

4. Safeway Inc. — Soldotna

5. Eagle Quality Center (Safeway) Homer

6. Home Depot

7. Spenard Builders Supply

8. Three Bears

9. Alaska Communications Systems

10. Enstar Natural Gas Company

Borough FY2004

1. Fred Meyer Inc.

2. Safeway Inc. — Kenai

3. Homer Electric Association

4. Safeway Inc. — Soldotna

5. Eagle Quality Center — Homer

6. Spenard Builders Supply

7. Alaska Communications Systems

8. Home Depot — Kenai

9. Eagle Quality Center — Seward

10. Three Bears



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