Elk River EDA goes with status quo in policy debate

by Jim Boyle
Editor

Members of the Elk River Economic Development Authority (EDA) have decided against developing a donation policy on a 6-1 vote Monday, May 14.

They considered three options, and decided to go with the status quo and review requests as they are received.

The EDA budgeted some funds this year and years past for specific anticipated requests in the budgeting process.

“Challenges occur when requests come up that have not been budgeted for and staff has to account for these expenditures,” said Clay Wilfahrt, the assistant director of economic development.

The authority also considered having a “no donation policy,” which would resolve the budget and time-frame issues and allow the EDA to focus on other initiatives.  Minnetonka has such a policy.

“The counter-argument is if there is an event or a cause there’s no flexibility to give to that organization even if it does create an economic benefit,” Wilfahrt said.

A third option considered would have established an application process and stated clear deadlines for requests to be considered.

Pat Dwyer, a member of the authority, said his recollection from a previous discussion is that they were advised by the city attorney not to have a donation policy. Others like Nick Zerwas and Dan Tveite said they recalled the same thing.

Wilfahrt said the city attorney believes the EDA could go in any one of the three directions,  but whatever the policy it would have to be clear and administered consistently.

Member Paul Motin said his preference would be to have a policy that takes emotion out of the decision-making process by establishing deadlines and making the decisions part of the budgeting process.

“If we say no we’re the bad guy,” Motin said. “We look like we want to put them out of business, which isn’t the case. We want all (the groups) to succeed.”

He suggested groups get their requests in the year before they happen so they can be considered in November and December as part of the budgeting process. If not then, than at least three or four months prior to the event.

Bryan Provo, the newest authority member, had questions about how the amount and size of donations were determined.

The EDA decides how much to set aside during the budgeting process, such as in the case of setting aside funds for the Fourth of July fireworks.

Requests that go beyond what is budgeted, if they are approved, necessitate a budget revision so money can be shifted from one area to another.

“It’s a matter of re-allocating money that has already been levied,” Zerwas said. “It’s not increasing the levy.”

Provo suggested the amount given should be determined by how much is coming in and not how great the needs of others might be.

“At Alliance Machine we take a percentage of profits, pool that dollar amount and I let my employees vote on how we’re going to be giving money away to charities,” Provo said. “That seems to be the most non-biased approach. It lets me sleep at night. There are so many people in desperate need of funds during tough economic times.”

Matt Westgaard said it would be nice to work requests into the budgeting process but that’s not always possible.

“I would be in favor of keeping the status quo,” Westgaard said.

Dwyer made a motion to go with the status quo and review requests on a case-by-case basis. Zerwas seconded  it.

Motin suggested including a stipulation that requests needed to be in three months before the event.

Zerwas said he was not willing to accept the addition.

“I see where you’re coming from, but as soon has you make a 90-day rule someone will bring in a request 75 days before,” Zerwas said.

Motin suggested that would make it easy to just say “no.”

Others were not quick to climb aboard Motin’s line of thinking.

Provo asked how such requests and giving to charity can be considered of value to the EDA with its role of fostering economic development.

Tveite said it isn’t necessarily a charity that is asking.

“As a board we have to look at the event and say,  ‘Does this intrinsically add value to the business community?’”

Personally, Tveite said, community gatherings bolster the community and make it more attractive to businesses considering locating here or staying here.

“That’s the criteria I look for,” he said. “I don’t look at it as a charitable donation. Sometimes it is the indirect benefit.”

Dwyer said he agreed.

“We do more than business recruiting …,” he said. “It’s kind of like our branding program or marketing.”

The EDA approved the motion to keep the status quo on a 6-1 vote with Motin casting the lone ‘no’ vote.

He said he needed a deadline for applications to avoid last-second emotions in the decision-making process.

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