Economic groups face cutbacks in funding

Gainesville Sun - October 10, 2001
By JOE COOMBS
Sun business writer

Government funding no is longer guaranteed for several local economic development organizations, as Alachua County commissioners continue to reshape the budget and keep a tighter rein on spending.

Rather than make direct contributions to the Council for Economic Outreach (CEO), East Gainesville Development Corp. and other groups, the county has established a "task fund" that will be distributed for specific development projects. The move was made out of concerns for available funding, and to make sure that contributions aren't given to "duplicate efforts," County Manager Randy Reid said.

"Right now, there's more money being requested than what's available," Reid said. "There has also been some frustration from the groups that we haven't funded in the past."

In fiscal 2001, the county reserved $600,000 for economic development groups and to help pay for the construction of the Gainesville Technology Enterprise Center. For fiscal 2002, which started Oct. 1, the "task fund" will be about $350,000, and will come from revenues collected on a new occupational license tax.

County officials must still determine guidelines for funding applications submitted by local economic development groups. Reid said a workshop will be scheduled sometime this month.

The situation has created a little uncertainty for CEO, said Bob Rohrlack, president of the Alliance for Economic Development. The group is the coordinating agency for CEO and the Gainesville Area Chamber of Commerce.

"Obviously, we're disappointed with the decision," Rohrlack said. "Both the city and county benefit substantially from their contributions to CEO. Why would they stop supporting something that increases their budgets through tax revenues from businesses?"

The city of Gainesville has contributed $100,000 to CEO since its inception in 1989, the county provided $50,000 annually and the Gainesville Regional Airport Authority still contributes $35,000 each year. Together, the $185,000 represents about 30 percent of the agency's budget, Rohrlack said.

Employee reductions are not a concern at the moment, Rohrlack said, since the Alliance, chamber and CEO have a number of shared staff. However, program cuts could be in order with reduced funding, Rohrlack said.

The East Gainesville Development Corp. (EGDC), with only three employees and a small budget of about $150,000, relies even more on municipal aid than CEO. Scherwin Henry, chairman of EGDC's board of directors, said the county contributed $22,500 to the organization's budget last year.

EGDC will get some money this year from the Front Porch Florida program, which gives certain neighborhoods preference on state and federal grants. EGDC helped to secure Front Porch status for Gainesville's Duval Heights area.

"That will help to supplement some of our income," Henry said, "but for a group like ours, a lot of the programs don't produce revenue.

"I don't think it's a bad thing that the county is trying to do by making sure they're spending money more carefully. But without direct funding, we can't really plan the rest of our year's programming right now."

The city and county will examine several cost-cutting measures for economic development in the coming months, Reid said. Other possibilities are to create a single economic development entity between the city and county and to work with development organizations to draft a cooperative plan of growth.

Joe Coombs can be reached at 338-3102 or joe.coombs@gainesvillesun.com.

See October 09, 2001, issue of Gainesville Sun for original article.