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Council debates funding allocation for LCEDC

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By Chris Sardelli

 Another Lancaster County Council meeting, another debate over the future of the Lancaster County Economic Development Corp.

Continuing a trend seen during the last few months, council members once again debated a facet of the LCEDC during its Nov. 25 meeting. This time, council spent almost an hour discussing possible ways to create a separate funding structure for the organization. 

County Administrator Steve Willis presented a draft ordinance prepared by County Attorney Mike Ey which would establish a separate fund for LCEDC use, with funding allocated solely by council. Ey’s draft ordinance suggests allocating 25 percent of funds for job training, 15 percent for marketing, 10 percent for operations and 50 percent for product development. 

Up for review by council were these funding amounts, as well as the percentage amount of funds from fee-in-lieu of taxes (FILOT) agreements that could be dedicated to economic development. Though many officials have discussed allocating 7 percent of such funds, which come from FILOT agreements with new companies, Willis said the number has not been finalized. 

Councilman Bob Bundy discussed the pros and cons of specifically stating percentages. 

“The fund needs to have a use instead of just hanging out there,” Bundy said. “It’ll burn a hole in your pocket. So it’ll take an incredible amount of restraint on council’s part. So if we don’t have a percentage, we need to have a particular use.”

No matter which method is selected, Councilwoman Charlene McGriff felt confident that council would be diligent with its allocations of the funding. 

“Regardless of whether we decide to do a percentage or a set amount of money, we’ll be in control of the money,” McGriff said. “If we set it aside, it’ll pull money from the general budget.”

Councilman Brian Carnes urged council not to think of the LCEDC’s funding as “free money.”

“It’s money not currently in the revenue stream,” Carnes said. “I liken it to a 401k. It’s all gonna come out before it ever comes into the revenue stream, so it’s new money not in the revenue stream.”

McGriff disagreed with Carnes’ interpretation.

“But new money always finds its way into the revenue stream. I’m certainly not in favor of setting aside a percentage. We’re taking money slowly from schools and kids, so no, I’m not in favor,” she said. 

As for Councilman Jack Estridge, he urged council to remember that the benefits of such funding won’t been realized for several years.

“This will take time, maybe a decade, to even realize it,” Estridge said. 

‘No purpose’

The idea of transferring the funds was not supported by Councilman Larry Honeycutt.

“In a time where we need a new detention center, we want to put 7 percent fee-in-lieu in a fund that can be used down the road in 10 years? It should be in the general fund now. I see no purpose in that,” Honeycutt said. 

Despite the objections, Carnes urged establishing funding for LCEDC.

“We need to invest in economic development or we’re gonna be left behind,” Carnes said. 

Council chairman Larry McCullough explained the process of how funds from fee-in-lieu agreements could potentially lead to more economic development projects, though he said it all begins with having the right infrastructure and buildings for new companies to move into.

“If you don’t have spec buildings, then you’re not going to get projects,” McCullough said. “If you don’t have these, you need to scratch your head and say are we even in the economic development business?”

“Say you get two projects and they generate a certain amount of funds. Then that helps get five projects. The more projects you get, then you’ll have a return on your investment,” McCullough said.

Based on council’s discussion, Willis said an ordinance will be presented at the Monday, Dec. 9 meeting to create a separate LCEDC fund with no set percentages, though McGriff wanted more information before she’ll cast a vote. 

“So are we gonna have a plan or just an ordinance without a plan? How will we use money?” she asked.

Carnes said a funding structure is not a priority because of the long time it will take to generate funds from fee-in-lieu agreements.

“There’s no use putting a plan in place because the first money doesn’t come in for a couple years,” Carnes said. 

But McGriff again urged council to develop a plan for how the funds will be used.

“I’m a planner. I’ve got to plan this. This is not enough for me,” she said. 

Honeycutt wondered if spec buildings are the answer to wooing new industry.

“I heard us talk about spec buildings. What kind of spec buildings would take care of 2,000 employees?” Honeycutt asked, referencing comments previously made by LCEDC President Keith Tunnell about a company that recently passed on Lancaster County. “We need to know what we want and need.”

Tunnell stepped to the microphone to clarify his comments.

“We lost the 2,000-jobs project because of a lack of infrastructure on Riverside Road,” Tunnell said. “We lost the opportunity because of no infrastructure, not because of spec buildings.”

Although that company ultimately passed on the county because of infrastructure, Tunnell did champion the creation of more spec buildings. 

“About 80 percent of projects from the Department of Commerce and that we generate are looking for an existing modern building with the right ceiling height. If you don’t have a building, then you lose out,” Tunnell said. “Having a building will get you a visit. And then you have the opportunity to sell your community.”

Returning to the topic at hand, the LCEDC funding structure, Tunnell reminded council it will take time to generate funds from fee-in-lieu of taxes agreements and to then reinvest them in the county’s economic development efforts. 

“As you generate more and more projects, you will get more and more revenue in the mix,” he said. 

No votes were taken on the issue during the meeting.