EDC will keep its reduced county funding — for now

Sarasota County businesses will continue paying license taxes.

And the Economic Develop Corp. of Sarasota County, at least for now, will remain a $1 million-plus line item in the county’s budget.

The two issues, unrelated but still conflated, were settled during Tuesday’s meeting of the Sarasota County Commission, handing back-to-back defeats to Commissioner Mike Moran, who wanted to both eliminate the annual tax paid by county businesses and further curtail the funding of the EDC — the county’s third-party nonprofit partner in industry recruiting and providing concierge services to businesses — by more than the one-third cut already included in next year’s county budget.

Moran has been on a six-year crusade against EDC funding, dating back to a debate with former EDC leader Mark Huey regarding tangible return on taxpayer investment, primarily in the form of job creation.

“It was a fundamental disagreement to the point where he showed me documents from national EDCs that EDCs can't be measured, and I just fundamentally disagree,” Moran said. “I’m not interested in giving a million dollars for concierge services. I want Excel spreadsheets and results, and until I see that I'm not going to be supporting this.”

Moran and Commissioner Christian Ziegler were on the short end in opposing both a motion to maintain the business license tax as is rather than reduce or eliminate it — a vote that occurred in the morning session — and a motion to maintain funding of the EDC at two-thirds of previous levels, which highlighted the afternoon.

Both were approved by 3-2 margins.

Ziegler and Moran argued that the business tax, small though it is, was an unnecessary burden, and that the EDC, which will receive more than one-third of its projected $1.03 million in public funding for fiscal year 2022-23 from that tax, had not yet demonstrated in measurable terms its value for the taxpayer dollar.

This even after EDC President and CEO Lisa Krouse and Vice President Business Development Services Erin Silk highlighted multiple course alterations within the organization demanded by county commissioners for several years.

Krouse joined the EDC 11 months ago.

“It's hard to believe that a year has passed since our last budget presentation,” Krouse told commissioners. “I think it's safe to say that we have turned the ship, although I would readily concede that it's not perfect and it hasn't been easy and that there's a lot of work still to be done.”

‘A miraculous turnaround’

For Moran, the issue is about numbers, such as projected job creation of more than 5,000 that never materialized, which has been used in the past by prior EDC leadership as a pitch for continued county funding. It’s also perhaps personal, as pointed out by Commission Chairman Alan Maio, who reminded Krouse that former EDC board members would scream at Moran in public settings when he dared challenge the organization's effectiveness.

While hard feelings may linger, Maio also pointed out that the EDC has made the kind of progress in the past year he wished had begun four years ago.

“I have to tell you cutting down one-third (of county funding) after that effort for me is enough for now,” Maio said. “This has been a miraculous turnaround.”

Maio described the 2021 decision to reduce the county contribution to the EDC by one-third beginning this fiscal year — with the threat to phase-out its funding entirely by 2025 — was the wake-up call the organization needed, even though it had begun to right the ship prior to the pandemic under interim CEO and former Longboat Key Town Manager Dave Bullock, who took over in 2019.

“We can dance all around this, but those substantive changes were made in an expanded board, a different board, a board with a different attitude,” Maio said.

Ziegler admitted the EDC was making progress, at the same time contending he had heard such promises before and now, despite improvements made under Krouse over the last 11 months, it is too little too late.

“Maybe four years ago if they said, ‘we're going to pivot and we're going to change,’ maybe that could have in my mind saved the organization at that time. But that didn't occur and now we're hearing the same promises that I did four years ago,” Ziegler said. "It's still the same pitch, and I just can't find a way in my mind to justify giving a million dollars toward these efforts with that historical knowledge.

“That has nothing to do with the team. The team's outstanding and I think the team listens. I think they communicate well. I think they're accessible and I think they're sharp. But again, we’ve got to decide is this a good use of a million dollars of taxpayer money. I'm just not getting there right now.”

Funding imbalance

Despite the EDC’s presentation and praise from other commissioners, Moran still wants data that reflects a viable return on investment. Much of the EDC’s work is intangible — serving as the county’s business permit arm, hosting site visits, allocating Covid-related CARES Act funds in behalf of the county, and marketing the county to new businesses and relocations. As a private entity, it can also perform tasks a government cannot.

Among those deliverables Moran and Ziegler want is a commitment by the business community to increase private contributions to the EDC, which had set a goal of equal funding from the public and private sectors. County funding makes up 64% of the EDC’s budget.

“It's always been the goal to be 50-50,” Commissioner Nancy Detert told Krouse. “What year do you envision that happening?”

"I honestly I don't see it happening next year, but I think within the next two years, we can do it,” Krouse responded. “We've moved the needle. We were at 70% (county funding) when I walked into the into the seat 11 months ago, and now we're at 64, so the business community has rallied behind us. I'd like to say by the end of this year, we could be a 50-50, but I want to be truthful and honest and I don't know when that will happen.”

That level of candor struck a chord with Ziegler, who asked Krouse why the organization had yet to achieve balanced funding.

“To be perfectly honest, it starts with leadership” she said. “I think there was a real lack of confidence in the organization. I don't think the messaging was very clear or the value proposition was very clear.”

Ziegler compared Krouse to EDC leadership of the past.

“Your openness and your honesty is very refreshing,” Ziegler said. “When I filed to run for commission four years ago, I had lunch with someone and they basically told me, ‘Don't even think about touching the EDC.' It was almost like a borderline threat because it was so closed off and so closed down. That immediately created red flags, but this honesty and this openness and your willingness to really address the issue in an open forum like this at a public meeting is very refreshing and very appreciated.”

Refreshing and appreciated though it was, it ultimately fell short of garnering Ziegler’s support.

Commission Vice Chairman Ron Cutsinger reminded commissioners that the EDC has addressed every area of concern when the decision to cut funding by one-third this year, with possible future cuts, was made. It has new leadership, a new staff, a new board of directors and a demonstrated willingness to cooperate with county government.

“I understand the history here. It's unfortunate. Over a long period of time, a lot of money got misspent,” Cutsinger said. "But at this point we’ve got a new staff, we’ve got a new board, we’ve got a new leader and we see a report coming back to us of really doing what we asked. We are cutting the budget by a third, but it will give them an opportunity. They've got another year to come forward and see where this goes.

"I would like to give it that chance.”