Danville City Commission approved amended terms Monday for a funding agreement with agencies receiving public money.
The funding agreement, approved earlier this year during Danville’s budget process, had become a sticking point between the city and local economic development groups primarily because it gave the city the ability to halt or recall funds allocated to an agency without a specific reason. Jody Lassiter, president and chief executive officer of the Danville-Boyle County Economic Development Partnership, had argued the provision conflicted with the EDP’s governing documents which stipulate governments agree to deliver allocated funding for the whole budget year.
Monday’s version, drafted by City Attorney Stephen Dexter with input from Lassiter and City Manager Ron Scott, modified the language to say the city can reduce all or part of an appropriation “in the case of a budget shortfall.” In such cases, the funding would be reduced for all city-funded agencies by the same percentage.
The City Commission also voted to approve the document that formalizes the city’s participation as an EDP member.
The existing funding agreement put into place earlier this year requires all groups seeking funds from the city to explain the public use for the money, allows the city to audit an agency’s books and records at any time, requires written statements be filed with the city, and obligates the agency to reimburse the city if a court finds money was not spent for a public purpose.
The city allocated $120,000 for the EDP in the recently-approved budget. So-called earmarking of funds for agencies, another issue separating the two sides, appears to be off the table at least until the next budget cycle.
Mayor Bernie Hunstad and Scott had raised the possibility of requiring the city’s funds to be redirected specifically toward business recruitment and development, and apparently approached Lassiter about how much of an earmark would be acceptable to fund those activities. Commissioner Gail Louis also had voiced concern about the amount of funding that goes directly to marketing and recruitment.
Lassiter and others involved with the EDP had questioned whether the group, or individual partners, were being singled out for extra scrutiny.
During the last commission meeting, Dexter said earmarking likely could not be enforced under the current framework of the funding agreement. Scott said Monday the matter would not be pursued for any agency for the new fiscal year beginning July 1 but said it may be revisited when the next budget is drafted in the spring.
Before the commission voted in favor of ratifying the agreement between all the EDP partners, former mayor Hugh Coomer spoke about the unwillingness of the Danville-Boyle County Chamber of Commerce, which is paid by the EDP for services, to disclose its financial records. Coomer cited a notice of rejection for an open records request filed with the Chamber of Commerce.
“I am concerned we’re not privy to the financial information of an agency the city is supporting,” Coomer said.
Lassiter noted the chamber, one of two non-public EDP partners along with the Boyle County Industrial Foundation, provides services to the EDP. He said Chamber Executive Director Paula Fowler supports both existing and new business development in her role as executive vice president of the EDP and said the chamber also provides bookkeeping and staff support for all of the EDP partners.
Hunstad pointed to state law which says agencies are public for the sake of open records only when they receive 25 percent or more of their funding from public sources. The chamber’s budget is about $180,000, and the agency receives about $20,000 in fees from the EDP.
The new version of the memorandum of agreement between the city and all of the EDP partners includes language about withholding funds in case of a shortfall and a requirement that all audits of the EDP or its partner organizations should be turned over to the city within 30 days.
Hunstad, along with commissioners Ryan Montgomery, Kevin Caudill and J.H. Atkins voted for the memorandum of agreement, but Louis abstained.
The EDP includes the city, Boyle County Fiscal Court, Junction City, Perryville, the chamber, industrial foundation, Danville-Boyle County Convention and Visitors Bureau, Heart of Danville and Main Street Perryville.