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News
News
IRON COUNTY — The Iron County Board of Commissioners revisited the issue of funding for the Iron County Economic Chamber Alliance at the board’s general meeting, held May 11 at 3 p.m. While ultimately there was no action taken, the discussion seems far from over.
ICECA Managing Director Mark Bromley and Board President Katie Clark spoke at the meeting regarding the organization’s submitted proposal for $36,000 in funding to go toward what Bromley called “ongoing support” for the period from April 1, 2021 to March 31, 2022.
In the ensuing discussion, old issues arose with commissioners offering words of support to the ICECA’s impact on economic growth in the county while simultaneously questioning the ICECA’s ability to quantify its success metrics and funding strategy.
“Economic development is something that, as most of the developers will tell you, it’s hard to put a long-term plan together,” Bromley said. “What you do is you put your goals and where you want to be, and then we work towards them because different opportunities come up, different challenges come up and you have to be flexible.”
He pointed to the current state of the local housing market, calling it a “critical” situation with a dearth of rentals and affordable housing. Bromley said he hoped to put together a working group including representatives from the county, cities and townships that could examine financial incentives or tax-abatement programs that might incentivize building.
The documents submitted in support of the request included the ICECA’s 2021 Road Map identifying six areas of focus: local business support, economic development, broadband access, workforce development, tourism, and entrepreneurial incubation.
While each initiative did include a breakdown of specific activities the ICECA would undertake -- things like grant research and support, technical assistance and business planning, an inventory internet service providers’ capabilities, the creation of a concierge program to support tourism and a task force to address workforce development -- it lacked a concrete outline for exactly how the monies would be spent.
“I still want to see, ‘These are the things we’re going to do, and these are the monies we feel are needed to accomplish these things,’” said Commissioner Mark Stauber. “I need to have something a little more. I understand things are going to change because you never know what’s going to happen, but there should at least be a little more level of detail.”
The county’s one-year contract with the ICECA for $10,000 expired in 2019. For the three years prior, the ICECA had received per-capita taxpayer support from county municipalities in the amount of $35,451 per year.
The organization also received three payouts of funds left over from now-defunct Iron County Economic Development Council in the amount of $43,293 over those same three years. Those coffers ran out in 2019. At the same time, the county was struggling to meet its Municipal Employees’ Retirement System pension obligations.
As 2019 neared its close with an impending pandemic yet to emerge, the Board of Commissioners debated its budget for months. Commissioners Tim Aho, Sharon Leonoff and Ray Coates supported a proposed budget that omitted ICECA funding, with Finance Committee Chair Mike Stafford and Board Chair Pattie Peretto consistently voting against budgetary motions offered by the Aho-Leonoff-Coates faction. (Aho, Leonoff and Coates no longer serve on the Board of Commissioners.)
In the end, the board did not renew its contract with the ICECA for 2020. The organization struggled in the aftermath of the decision. As the Covid-19 pandemic emerged, businesses were shuttered, events canceled, and revenues from the RV Park and membership dues dwindled. There was staff turnover as the organization lost both its chamber director and economic development director.
Bromley took over managing the ICECA last October. Having previously served as the board vice president, he had worked closely with the former staff. In the months since the departures, Bromley had volunteered to help keep businesses informed of evolving restrictions and regulatory measures put in place to limit the spread of Covid-19.
As months went on, the organization broadened its efforts to help connect businesses to funding opportunities, as well as learn and implement the tools needed to operate in an increasingly distanced and digitized marketplace.
Stauber and Jacob Conery expressed skepticism over a return on the county’s investment should it opt to fund the ICECA. Conery suggested proposing a millage to fund the organization. Peretto inquired as to the ICECA’s intent to hire a new economic development director.
Recently, the ICECA hired Zach Hautala as its chamber director. Bromley said that, while this freed him up to concentrate more on economic development, he also hoped to provide Hautala with classes and training to support the chamber director’s growth into an economic development role.
“If that’s not the course, we do intend to put out a bid and hire an economic developer to take over, but quite frankly -- that costs money.” Bromley said, going on to add, “Right now we’re operating on a very, very thin margin and without having a long-term commitment...it’s very difficult to have the confidence to go out and try to attract someone.”
Stafford, the Finance Committee chair, responded by stressing the distinction between chamber activities and economic development efforts. He said chamber activities, things like events and support of existing businesses, ought to be self-funded by the chamber and its members; while economic development activities, initiatives that draw new business and other investment into the county, could warrant public funds.
Bromley asserted that chamber activities are self-funded, but still pushed back on Stafford’s comments, noting the unprecedented nature of the past year’s pandemic and its effect on small and rural businesses.
“In the year that we just had, it’s probably more important to keep the existing businesses that we have,” he said. “That’s been our focus and we think we’ve done a very good job. Very few businesses went out of business completely.”
Stafford didn’t disagree, responding, “Actually, I commend you on (your efforts), I think you did a great job.”
Bromley acknowledged the need to attract outside investment and a more robust workforce. But without addressing existing issues related to housing and internet access, he said it was risky to externally market the county for anything beyond tourism if it couldn’t meet the needs of potential new residents.
Bromley said the ICECA also receives support from outside agencies like U.P. Michigan Works, which could potentially subsidize the salary of an economic development director, and the county’s municipalities and townships -- but that the latter two take their cues from the county.
“Understand that we have partners in this, too,” he said. “We have the townships and the cities that contribute, and they’re looking from direction from you to see if the county is going to support us.”
He expressed concern that without a commitment from the county, it would be difficult for the ICECA to implement its 2021 Road Map with confidence and that its other partners might pull support.
“Without your commitment, (the plan) falls flat on its face, because I’m not going to get commitments from my other partners.”
While Stafford stressed that the ICECA did have a commitment from the county, he also noted the annual budget was already established and “certainly we can be looking toward next year.”
The one caveat, as noted by both Peretto and Stafford, is the $2.15 million awarded to Iron County as part of the American Rescue Plan. The commissioners remain unclear on the specific limitations regarding how and where the money can be spent, but seemed to agree that if allowed, some of that money could go toward supporting the ICECA.
“If we don’t support the funds, the optics are that we’re not supporting (the ICECA) at all,” Commissioner Jeff Ofsdahl said, then adding, “We need to support it, and we need to support it as quick as possible because there’s a lot of people in this county who are looking to us to show some type of support.”
Peretto also voiced her desire to support the ICECA and reiterated that the county should receive more clarification regarding incoming federal funds in June.
As the discussion neared its close, Civic Counsel Steve Tinti stressed that the county could not legally fund the ICECA directly. Instead, it would need to put out proposals for contracted services that the county would fund.
“For many years, Iron County has had circular firing squads on economic development,” Tinti said, describing a boom-and-bust cycle every three to four years featuring a rotating cast of economic developers.
Tinti added that since Jan. 1, 2020, the Board of Commissioners had not provided any funding at all toward economic development.
Tinti then pointed to the next agenda item, which addressed a disagreement between the county and Cornerstone Business Group regarding the payment schedule, penalties and interest charged for a $30,000 economic development loan. (Ultimately, the commissioners voted unanimously to pursue legal action if the remaining balance, as assessed by the county, is not repaid or arguing documents provided within the following 30 days.)
“We have a cycle that seems to fail over a time period,” Tinti stressed, “And one of the problems that seems to reappear is failure to articulate goals, failure to hold accountable, and failure to adequately address and describe what you’re going to do. I just point that out for everybody, because there are a lot of legal niceties here on top of the financial issues.”