The Kenai Peninsula Economic Development District survived the budgetary ax that threatened to wipe out its primary funding. But the organization did not escape some major fiscal downscaling, as its $90,000 budget was reduced by 44 percent at Tuesday night's Kenai Peninsula Borough Assembly meeting.
Going into the meeting, however, no funds were allotted for the nonprofit organization from the proposed budget borough Mayor Dale Bagley and his staff wrote up.
Bagley initially recommended discontinuing the borough's contract with EDD and reallocating $50,000 to the borough's Comm-unity and Economic Development Division for forum planning and reporting. He created the CEDD in 2000 to market the borough and develop businesses, and it currently includes an oil and gas liaison and an economic analyst, as well as a director.
The EDD was established to locate resources to grow businesses on the peninsula, as well. EDD's funding summit last fall was directly instrumental in building peninsula communities, said Barry Creighton, one of the founders of the Kasilof consumer-run mental health community, Ionia.
"We received on the spot $86,000 to complete our community center construction," Creighton said.
EDD Director Jim Carter said Wednesday he was pleased to receive $50,000 from the borough in light of possibly having his entire budget cut.
"I'm real appreciative of the borough's investment," Carter said. "Fifty thousand dollars is what I expected to receive."
And that is what he got when assembly member Chris Moss of Homer proposed an amendment to the borough budget appropriation ordinance that transferred the sum from CEDD to the EDD.
"I think two different economic development departments are not unnecessary," Moss said. "I think it is important that there is some continuity. It gives two different ways to approach economic development."
East peninsula assembly member Ron Long agreed the EDD was valuable to the peninsula, noting the organization provided a source for state and federal economic development grants through the Alaska Regional Development Organiz-ation program and from the U.S. Department of Commerce's Econ-omic Development Administ-ration.
"It would maintain our access of ARDOR funds and our relationship with the EDA," Long said.
Assembly member Gary Superman of Nikiski opposed funding the EDD, however, saying the organization should be able to fend for itself financially.
"In the early years, it was told to the assembly that EDD would become self-sustaining," Super-man said of the message he received when he joined the assembly in 1989. "That was 14 years ago."
Superman said although he would normally "line out" budget items for the American Municip-alities League, he didn't last year and attended a meeting where he gained some insight to support his decision.
"The worst thing that a municipality can do for economic development was to have two competing economic development entities," he said.
The amendment was voted on and passed 6-3, with Superman, John Davis of Kalifornsky and Paul Fischer of Kasilof placing the dissenting votes.
South peninsula assembly member Milli Martin then moved to transfer another $25,000 to EDD that had originally been scheduled to go to proposed Homer and Seward extensions of Central Area Rural Transportation System.
Although the funds were deleted in the first part of a two-amendment vote, the second measure to transfer the funds to EDD failed in a 5-4 vote.
Fischer, Moss, Superman, Grace Merkes of Sterling and assembly president and EDD board member Pete Sprague voted down the amendment.
"The EDD needs to know that they do need to stand alone," Sprague said. "We say that a lot, and I don't want it to be lip service. This is a way to get the message across."
Bagley said the assembly's action was not as harsh as his may have been.
"This is a soft landing for them," he said of EDD. "The assembly was just willing to make the cuts a little softer than I was. It says that they'd better start finding ways to support themselves."
Carter said he was disappointed in what he perceived as a politically motivated decision, pointing out that two former borough assembly members Jack Brown and Bill Popp took positions with the CEDD shortly after its inception.
"It's unfortunate that with the current economic climate that we have, that economic development is one of the most politicized issues," he said. "It is surprising to me that our neighbors are losing their jobs and we're not using all our tools in the toolbox."
Carter said the organization has land adjacent to its location that will be sold for $40,000 to make up the difference he budgeted for this year.
He said the EDD will have to make some cuts, trim expenses and possibly reevaluate the office's three staff members.
"Our travel budget for staff development will be cut. We were going to put $20,000 toward research for the business industry," Carter said, listing some expenses that may go.
"If I have to, we may have to look at staff and benefits. Six months from now I might have to lay somebody off."
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