City Council to vote on creation of new joint economic and community development board tonight

Published 8:46 am Thursday, April 14, 2016

City of Elizabethton

The proposed interlocal agreement, which was deferred after nearly two hours of discussion at last month’s City Council meeting, will again go before the Council for a vote tonight.

The agreement would form a new Joint Economic and Community Development Board (JECDB), which is required by the state in Public Chapter 1101. The current JECDB is the Carter County Tomorrow (CCT), which also serves as the county’s economic development organization (EDO). In some counties, the two are one in the same, and in others, they function separately with shared goals.

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The new agreement was drafted by county attorney Josh Hardin after Carter County Mayor Leon Humphrey disclosed a number of compliance issues with the current JECDB. His administrative assistant, Susan Robinson, presented these to the County Commission in January. Listed among them were the fact that Johnson City, a municipality of Carter County, had no seat on the board, which is required by the state statute. Additionally, the board had never had a full annual audit, and was criticized for commingling non-profit funds.

The board has now contracted for a full annual audit following three requests by the Tennessee Comptroller.

“The thing people don’t need to lose site of is that CCT is noncompliant and has a tremendous number of violations,” Humphrey said.

At the March City Council meeting, Humphrey said the new interlocal agreement would not create a board to replace the CCT, but would rather create a separate JECDB to meet state requirements. It would have nine members from each municipality and from the county as well as representation from the Elizabethton/Carter County Chamber of Commerce as well as private sector business leaders.

Without a compliant board in place, Humphrey said he cannot certify compliance in order to receive grants.

“We can’t take advantage of tourism grants that are available or any economic and community development grants because our organizations is not certifiable,” said Humphrey.

He said CCT could continue to exist with the new board in place, but CCT would no longer be the state recognized JECDB.

Elizabethton Director of Planning and Economic Development Jon Hartman said while a JECDB and an EDO have different duties, they share a common purpose.

“A JECDB is a statutory required board for all counties to have,” said Hartman. “It’s function and job in accordance with Public Chapter 1101 is to foster communication between municipalities and the county regarding economic and community development activities – so their job is to bring all the players to the table to develop and put together plans.”

An EDO, he said, carries out economic development functions.

“So an EDO might be the people who recruit and do marketing and help small business get off the ground,” he said.

In Carter County, he said the consensus was to have one in the same, with the creation of CCT in 2006.
“They’re not required to be one in the same,” he said. “To me personally, I think its beneficial to have strong connections and interactions – whoever your EDO is should sit on or have influence on JECDB and vice versa.”

The ways in which they interact vary from county to county and may yield different results depending on a variety of factors, Hartman said.

Humphrey agreed, saying, “When you look across the state of Tennessee, there are so many variables; there are a hundred different flavors as to what can be in economic development.”

In general, if the JECDB and EDO are separate, Hartman said the JECDB should set priorities for the EDO.

Carter County would not be the first county to have a separate JECDB and economic development agent, if the interlocal agreement is passed. In fact, of the eight counties in the First Tennessee Development District, a variety of models for economic development agencies exist separately from or together with the JECDB.

Some, like Washington and Greene Counties have a combined JECDB and EDO. Others, like Unicoi and Johnson Counties, have a JECDB and an economic and community development director employed by the city and county.

Funding also varies for these models. Mitch Miller, CEO of the Washington County Economic Development Council (WEDC), said the WEDC is both a JECDB and an EDO. It is funded by the county and its cities as well as from private donors, he said.

Similarly, Greene County Partnership’s Vice President of Operations Vickie Andrew said their organization is both a JECDB and an EDO funded by the county, municipalities, the hotel/motel tax, private contributions, event revenues and private donors. Miller and Andrew said the annual budgets for each of these organizations are over $800,000 annually, but are divided among the organizations under their umbrellas. Economic Development in Greene County receives about $250,000 of the total budget, Andrew said.

The CCT currently receives less than $150,000 annually for economic development from the county and cities. The entities under its umbrella (Tourism, Chamber of Commerce, and Private Industry Council) receive separate funding.

Johnson County has a JECDB and a tourism and economic and community development director, Karla Purdhomme, instead of an EDO. Johnson County has a population of about 18,000, and she said their economic and community development budget is funded by the city and county as well as by grant funding.

“I spend about 60 percent of my time, and I work part-time, applying for grants,” said Purdhomme.

Her salary and grants vary from year to year, but she said they typically total about $100,000.

Humphrey said he favors Johnson County’s model for economic development because he said it has the greatest yield at the lowest cost.

“That county has brought in more benefit to the county as a whole than any of the other counties and spends the least amount of money,” Humphrey said.

He said, and Purdhomme confirmed, that with their limited income, they were able to acquire $8.6 million for Doe Mountain and $2 million in grants for the expansion of Parkdale Mills, the latter of which was an addition of 100 new jobs. Purdhomme said these were funded by grants and donations.

Humphrey said that once the interlocal agreement is signed by Elizabethton, Johnson City, Carter County and Watauga, the County Commission and City Councils of the three municipalities within the county will have to decide how to move forward.

“It will probably take us six months to a year to get this board fully compliant with all that’s required by Public Chapter 1101,” said Humphrey. “If the interlocal agreement passes, that’s the first step.”

Initially, he said the four mayors will convene, they will be educated, and they will outline statutory requirements and the types of individuals that need to be in the five remaining positions.

“Then we will research and assemble successful business leaders, and at the next meeting, after we’ve had a chance to think about this, we will try to fill all of those slots,” said Humphrey.

At the third meeting, he said they may be able to begin to do business.

He said Robinson, his administrative assistant, just received Tennessee certification as an economic developer, and that with that, he thinks they could manage economic development from the county side out of his office in conjunction with the efforts of the city and the new JECDB.

“I don’t think we need to hire anyone right now to do something we can do with the resources and staff that we have,” Humphrey said. “I think with Ms. Robinson working hand-in-hand with Mr. Hartman in the city, we have it covered. I don’t know where we would be deficient in any area.”

Hartman said ongoing discussion regarding economic development has addressed the potential for forming a regional EDO between Carter, Washington and Unicoi Counties.

“What we’re looking at, in that case, is that each county would have to have its own JECDB, but our EDO would be some type of regional approach,” said Hartman.

He said this could be beneficial by providing more funding and by taking a unified approach at bringing developers to the region.

“The opportunity to join a larger regional EDO presents a potential opportunity for us to join our little bit of money with Unicoi and Johnson City’s money and make one big pot, and then that will help bring more resources to the table that we can utilize to help recruit business and industry to this region,” said Hartman.

Miller agreed, saying it was as if each county was currently trying to market a third of a piece of pie when they could join together and market the whole pie.

“I’ve always looked at Carter and Unicoi as champions for those communities because you need people in both those communities promoting and pushing economic development,” said Miller. “What we would love to have happen is to grow the public-private partnership to promote Washington, Carter, Unicoi and all cities within to have local governments be part of what we do, but also to have the private sector businesses.”

He said one business locating in Carter County and providing 500 jobs would benefit all three counties. An example he noted is Summers Taylor, which employs residents of both Carter and Washington Counties. In the broader region, he noted the impact that Eastman Chemical Company has on his residents who commute to work there.

“The people that live and work in separate counties don’t see those county lines,” Miller said.

Hartman agreed, saying a manufacturer in Johnson City that could hire 1,000 people would employ Carter County residents, who would spend that salary and pay taxes here in Carter County.

“We need to realize that our economy is intrinsically tied to Johnson City’s, and vice versa,” said Hartman. “It’s not a question of, ‘Should we join economies?’ It’s a matter of they are joined, so what potentially benefits Johnson City will inevitably provide jobs for citizens of Carter County.”

Alternatively, he said a benefit to managing economic and community development locally is that residents have more influence on the direction in which they want to go.

“When we join a regional board, we get a voice, and we are heard, but if the other counties want to move in a different direction, and that’s not the one we want to go in, then our voice is diminished,” said Hartman. “So we have direct influence over that local EDO, but the drawback is you have to fund that EDO and if you don’t fund it at appropriate levels, then why have it?”

After the March City Council meeting, Mayor Curt Alexander and Councilman Richard Tester, who also serves as the chairman and one of three interim presidents over CCT, said they like the interlocal agreement.

Tester said Wednesday he thinks the three-county partnership is a viable option for getting everyone on board and moving forward with economic development. He said he feels that CCT was created with good intentions, but it had poorly filed documentation at its onset and has since had high expectations with few resources.

“We don’t have a lot of resources to begin with, and we’re duplicating services and wasting money,” he said. “Economics 101 would tell you to collaborate and bring resources together to do economic development.”

Tester said if the interlocal agreement passes, the economic development responsibilities of the CCT would likely shift to the new entity.

“The discussions have been that once the new entity has been established, and once CCT fulfills its obligations, then the thought would be to turn the assets of CCT to the new entity, but that wouldn’t happen overnight. That has been discussion on the table,” said Tester.

Humphrey said if the new JECDB is created, he would like to see the CCT begin dissolution of its organization processed properly through the Attorney General’s Office and with the Secretary of State.

“Once the Attorney General has determined where those assets go — and in my opinion, those assets should go back to city and county proportionally — then those governments can decide where those funds are best suited to go,” said Humphrey.

Tester said the Council may vote on the agreement contingent on the county dropping the lawsuit filed against Carter County Tomorrow and the Private Industry Council doing business as the Workforce Development Complex.