Economic development policy questions

No, neither hostile takeover nor fireworks

I applaud my colleague, Erica Zweifel, for adding the discussion item about transferring the powers of the Economic Development Authority to the City Council; it always takes some guts to disturb the status quo and adding the element of surprise by adding it to the agenda at the meeting helped get both the Council’s and the EDA’s attention.  This proposal is also on the Tuesday worksession agenda. (Read the News and Locally Grown coverage, too.)

But why do it? Because the EDA has not presented any clear principles for economic development, has not followed the economic policy planning which has been done, makes decisions in an opaque and unaccountable way and levies your tax dollars to do it.

Having the Council serve as the economic development authority is only one strategy the City might employ to (re)gain control of economic development policy in Northfield, but I’d argue it is also the quickest and easiest way to accomplish this goal in the short term.

1.  Background: The EDA is not like the Planning Commission. The PC is an advisory board (with some decision making authority on variances) with no direct access to financial resources.  So, while the PC has the primary responsibility for drafting/updating the Comprehensive Plan and the Land Development Code, these are both documents presented to the Council for the Council’s review and adoption.  In individual land use decisions, the PC is the body which holds the public hearings and takes public input, then makes a recommendation to the Council.  The EDA, on the other hand, has the power to levy taxes, sell bonds, and spend money.  The EDA has a budget which is approved by the Council annually, but which it can then deploy as it sees fit (See Minn. Stat. 461.091 et. seq. for the statutory details).  Having levy and bonding authority should raise the bar for the EDA in terms of accountability.

2. Transparency and accountability: The EDA changed their meeting structure to shift the bulk of the discussion to subcommittees consisting of no more than three EDA members plus the EDA director; subcommittees operate under the open meeting law threshold of a quorum; meetings are not noticed nor minutes published.   When recommendations do come to the full EDA for action, the rationale behind them is not always clear and the tone of the discussion at the EDA suggests that EDA members themselves are somewhat suspicious about how recommendations are made.

The other more important piece is the policy part. The 1990 enabling resolution for the EDA states these objectives:

LEADERSHIP:   The EDA shall unite the leadership of the concerned groups within the community to develop a clear expression of priorities and programs for economic development.

REGIONAL STRATEGY:   The EDA shall develop a regional strategy for future growth and development that is based on the area’s strengths and assets.

RETENTION:   The EDA shall develop a program to help retain and expand viable existing Northfield businesses by evaluating and addressing their needs.

OUTREACH:   The EDA shall endeavor to attract new commercial and industrial growth that fits Northfield’s goals.

REDEVELOPMENT: The EDA shall encourage and support commercial redevelopment city-wide, with emphasis on the downtown.

FINANCING: The EDA shall become self-supporting.

IMPACT:   The EDA shall take into account the environmental effect, and the housing, schooling and infrastructure needs of commercial and industrial development.

How is the EDA is attempting to fulfill the Northfield Comprehensive Plan (and the Economic Development Plan) with its emphasis on sustainable development, compact growth, and enhancing the small town character of Northfield? Clear expression of priorities and programs?  Redevelopment?  Impact?   These questions are, to me, unaddressed.  When EDA members, Business Park Steering Committee members, and Council members have asked questions like these, there have been no answers and often dismissal of the questions.

3. Strategy: Having the Council take over economic development activities in the short term would allow the Council, the most accountable body, determine how to best manage economic development.  For the longer term, I don’t know that the Council wants the added duties nor does it have the expertise to manage these issues for the long term.  However, the Council can and should weigh in on what the City’s economic principles should be, how the EDA can help accomplish the goals of the Comprehensive Plan, and how dollars should be allocated to address these priorities.

In addition, having eliminated the position of City Planner and approved the early retirement of the Community Development director, this leaves the City with a reorganized department for community and economic development without a clear focus and with limited staff.  Having the Council function as the EDA for a limited period would allow us to finish thinking through reorganization with the Interim City Administrator to better serve Council goals before recreating an EDA to do the majority of the day to day work.

7 Replies to “Economic development policy questions”

  1. This is a good explanation of the background of the problems at the EDA, but slightly shies away from some of the thornier problems of which you seem to be aware …

    Examples:
    1. Although you mention the lack of ‘openness’ in #2, I believe you also know that the main cause of the lack of trust lies in the way the Executive Committee has been functioning. Their process has almost entirely precluded the full EDA board, which has not even been able, for a year or more, to get items that they consider to be very important on the agenda, which is now set primarily by the Exec Committee.
    1a. By the way, the work group designation, which ends up with no noticing or minutes was suggested by City Attorney Chris Hood, as the way to avoid violation of Open Meeting Law. I do not think Mr. Hood was doing anything ‘sneaky’; he was responding to the request made of him for a process.

    2. The staff person, Jody Gunderson, is in what I would consider to be a very poor position as he meets with the Exec committee on which there is a Councilor. Who does he represent in this ‘place’; the citizen Board, or his virtual employer, the Councilor.

    3. The problem of having a councilor on the exec committee is one which did not always exist, and I think should not be now, as it creates a problem of the councilor having a vote in two places., as well as the potential personnel problem expressed above.

    4. Several weeks back, in a Council meeting, Mayor Rossing, clearly stated that Mr. Gunderson, the City’s Economic Development Director, is NOT the Director of the EDA. (I can find that meeting date if you like.) However, given the process as implemented, I’m not sure what the mayor’s comment meant.

    5. When the Council meets on EDA issues, there is little or sometimes NO time for the full picture to be discussed, because either the full Board is not invited to be at the table, or the EDA is not included in the discussion at all.

    6. It is apparent when watching meetings, that the two consistently minority members have for almost a year been asking for many of the EDA’s problems to be dealt with: clarification of by-laws and role of the executive committee; full compliance with financial operations, as detailed in MN statutes; some ability to construct the agenda, etc, etc, etc.
    However, both Mr. Engler and Mr. Summa have been defamed, told their opinions did not matter, were not valid as just being their ‘opinions’, ignored when requesting financials, and this hostile environment to citizen involvement finally resulted in their voicing their dissatisfaction in board meetings where they were further ignored…. to the point as occurred in last weeks meeting, when a member asked Mr. Gunderson for his professional evaluation of two of the partner organizations he (JG) simply did not answer., and the Chair did not ask him to reply.
    Additionally in the same meeting , when a board member asked the director of one of the partner organizations about his process for vetting loan applications, that person asked the Chair if he should answer, and the Chair answered for him!

    All of that just proves how hard it is to be “transparent” if you cannot get an “open” answer.

    ***I must apologize for the long comment, but I fear the Council discussion will be less than complete, as it would have to involve descriptions of this nature of personal behaviors, and I assume it will be avoided; the public will then be left with the SINGLE IMPRESSION that all , or more probably some, of the citizen members of the EDA are at fault for this unfortunate situation.***

    1. I did not shy away from the interpersonal dynamics of the EDA, I deliberately tried to move the discussion from particular personalities and their conflicts to economic development policy. I want the body responsible for economic development working toward effective, sustainable, regional economic development outcomes. The EDA, as a body, has spent most of its time on the business park which has a very long term return on investment, will require massive investments of capital, and if built out as planned runs the risk of creating a satellite city almost entirely detached from the rest of the city. Even Jeff McMenamin of HKGi, the business park consulting firm, told the Planning Commission on Thursday that he believed the City should work on infill first and was very receptive to their concerns about the location of the business park. I believe there needs to be more attention paid to other priorities within the Economic Development Plan and, no matter what, a clear sense of what the goals of economic development in Northfield should be. I think increasing the tax base is one fine goal, but a very limited one. I’m pretty dubious about government “creating jobs” at all. I’m very interested in sustainability as a big part of economic development. And, regional planning needs to be embraced and pursued in a much more robust fashion. And I could go on and on, but for now I’m content to raise the issue that the EDA has not articulated any clear plan and this needs to change in 2011.

  2. Looking at this from the perspective of someone outside your community, it seems as though you’re in such a state of flux that having the city council temporarily assume the role of an EDA is reasonable.

    What? All these important goings-on and no city planner or community development director?

    Godspeed to the interim city administrator in sorting out all of this. Long-term, the economic development entity probably needs to be separate from the council and as transparent as possible considering that economic development agencies have every good reason to hold some conversations behind closed doors.

    Even though separate, the economic development and governing bodies–and the planning commission as well–should periodically hold joint meetings just to discuss what they are doing, why, and how their actions impact the policies that the others are attempting to pursue. This joint meeting or retreat strategy isn’t employed enough in local government, but it’s imperative that they all understand one another and attempt to forge and then work toward common goals.

  3. Betsey – I hope the council will think carefully before supporting taking over the EDA. For one thing, the council’s agenda is full already, with safety center planning, budget woes, staff still feeling its way with the new organization, to mention a few pressing items. A second concern is that beginning January 1, 2011, you will have a “new council” and although the new members are very astute, it would take them a while to get up to speed on all pending issues, much less take on the duties of an important, struggling EDA.

    Upon reading the EDA’s enabling resolution’s objectives. I don’t think that our present EDA has attended to them all, but as you suggest above, has concentrated on the business park. IN the meantime, the council has been mute.

    Instead of dumping the current group, how about taking Nancy Thompson’s suggestion and holding a carefully facilitated retreat, not lead by either the Mayor or EDA Chair or city staff, early in 2011? The council and the EDA, which might also have some new members, should at a minimum review the enablihg resolution objectives and collaborate on developing a work plan for the EDA for the coming year. And, in order to keep the EDA accountable to the council in the future, there should be regular, substantial reports from their EDA representatives, to assure that the EDA is on track.

    While I agree that the tactic of bringing a hot issue up as was done last week will get the issue on the radar, it is unfortunate that the council has let the matter fester as long as it has so that what some might call a desparate measure had to be employed. I believe what I have suggested above might make a similar tactic unnecessary in the future.

    1. Thanks, Jane. As I noted, I don’t think having the Council assume the EDA duties is the only way to correct problems. I do think the decisiveness of such a move, however, could be very effective at focusing the Council’s attention on what we need an EDA to do – and our policy-making role.

      The Council has not acted, but Council members have not all been mute, although we may have been muted. Some Council members – like me – have been asking for a fuller discussion of the budget and the EDA for months and have been told to wait. I am more confident with new Council members and Interim Administrator Madigan that the “big picture” discussion can begin for the 2012 budget cycle.

      At this point, I am looking forward to the discussion on Tuesday to hear what my fellow Councilors have to say about this issue.

  4. Betsey –

    In my opinion, you have done an excellent job outlining the key issues that may have caused Councilor Zweifel to consider the possibility of the Council, at least temporarily, taking on the duties of the EDA. I think you have also developed an efficient and effective “rubric” for evaluating the EDA’s performance in the past couple of years or so.

    Your first point, that the EDA is not like the Planning Commission, is an important one. As you know, I am not enthusiastic about all these separate levies; we tax you to pay for municipal government and then we tax you again to support individual parts of the municipal government. I think that when we are talking about spending a half million dollars of taxpayer money (the EDA’s reported budget plus draw from reserves for 2011), it is reasonable to have such a discussion take place at the Council level.

    Which leads me to your second point, transparency and accountability. I have attended most of the EDA meetings over the past seven years. I believe that there has been a steady reduction in the transparency of the EDA’s decision-making. In the past couple of years, more and more of the decisions have been made by the three-person Executive Committee and I, too, have observed that there has been a resistance by this Executive Committee to discuss these decisions at the level of the full EDA board.

    Your restatement of elements of the EDA’s enabling legislation was eye-opening. Such statements as “unite the leadership of the concerned groups within the community”, “develop a program to help retain and expand viable existing Northfield businesses”, “encourage and support commercial redevelopment city-wide, with emphasis on the downtown”, and “take into account the environmental effect, and the housing, schooling and infrastructure needs of commercial and industrial development” are all clear goals that merit further comment, and, even more, an evaluation of the group’s performance in achieving these goals in the past two or so years.

    Your reminder concerning the 2006 “Comprehensive Economic Development Plan” (for which taxpayers paid well over $100,000) is important too. It is another measurement by which we can evaluate the EDA’s performance over the past few years.

    As for your third point, considering the Council taking on the duties of the EDA in an effort to refocus its efforts on the goals of the enabling resolution and Comprehensive Economic Development Plan, it doesn’t seem all that drastic a step to me. As you may know, I worked in real estate, property management, asset management, and, most intensively, real estate development, from 1987 to 2005. I worked on projects throughout the Midwest, from Duluth to Shreveport. As a result, I met with a lot of Councils, HRAs and EDAs throughout the region. Based on these experiences, I would say that having the City Council act as the HRA and EDA is a fairly common approach.

    I think having the Council take over the EDA, at least for a short time, makes some sense. Taking this approach could allow the Council to quickly redirect the activities of the EDA toward the founding principals of the Enabling Resolution, the strategies of the Comprehensive Economic Development Plan, and within the larger context of the other major goals and expenditures of the city as a whole.

  5. Betsey and Ross… In between T’giving Turkey prep, I’d lik to make a few comments.
    First, I think the EDA ‘crisis’ has been exacerbated by a particular councilor who is trying to exert his will before he leaves the Council. He has long wanted to ‘win’ over EDA personalities that he does not support, and has certainly not supported the NDDC.

    Secondly, we have another councilor who is part of the Exec Committee, and has IMO, been engaged in a serious power grab.
    Thirdly, we have a chair of the ED who i8s a highlevel staff member in another city. I find that highly inappropriate for that involvement in the EDA for this reason: someone asked me last night what the EDA CChair would do if a desirable business wanted to locate in Northfield and that business was also considered to be desirable for the other city where the EDA chair is the Asst City Admin.? Conflict? you bet.

    The Council has not been dealing with the improprieties on the EDA for over a year… and I know that you, Betsey, have been trying to ‘catch up’ on all sorts of problems so I am not assessing blame; simply ID’ing what I see as a problem, and I have been watching the EDA a lot this last year , but can’t write about it for the LWV, because of Victor’s prior position.

    Furthermore, the remarks made by Councilor Pownell in this weeks work session … remarks about the council presenting one unified voice on the EDA issue, does not bode well for correction. The people on the Council who are concerned about the EDA’s structural problems are not in the majority.

    Will the Council , if they allow the EDA to continue, correct the noncompliance with statute issues?
    Will they open up the non-transparency of the Exec committee, and hold that group to the spirit of the bylaws?
    Does the Council realize the absurdity of the Staff presentation, which was exceptionally tech/graphically skilled but actually rather empty?
    How much can the Council criticize staff performance, given the ‘culture’ of protecting staff? and the ‘culture’ of allowing staff to constantly, selectively, denigrate citizens. Staff can say to citizen volunteers what citizen volunteers cannot say to staff.
    There are concrete, witnessed examples of that.

    ( “Hostile”environments cut both ways; these problems need to be in the open or they will continue to fester, and ruin the citizen involvement which is characteristic of NF’s Board and Commission system. The Mayor, in the last meeting conflated the EDA issue with the problem which she identified as “advisory boards becoming ‘advocacy’ boards”. )

    That is just a beginning list of questions that have to be answered and many apply to a broader area than just the EDA.

    So, although I agree with Ross’s last paragraph as an idealistic possibility, I view that possibility, from what I have seen so far, as slim, if not non-existent… not because there are not some councilors who have the very best of intentions… but because the odds are against them.

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