No money set aside for incentive fund
The city’s 2018 contract for economic development services doesn’t direct funds to job creation incentives suggested by Mayor Pat McCabe.
The city will continue paying the Hot Springs Metro Partnership $100,000 in quarterly installments, receipt of which will be conditioned on the partnership providing a “satisfactory progress report” at the end of each quarter to the Hot Springs Board of Directors. Previous contracts included the reporting provision but didn’t make it a condition of payment.
The nonprofit corporation supported by public and private contributions has a similar arrangement with Garland County. Monthly payments of its $75,000 annual contract with the county are released after the partnership provides a report to the Garland County Quorum Court.
McCabe proposed directing a portion of the city’s payment to an economic development fund for incentivizing capital investment in area job growth. The contract doesn’t stipulate the set aside, but City Manager David Frasher said it’s still a possibility.
“I think there’s going to be some discussion at the partnership board about Mayor McCabe’s idea about putting some of the money, maybe 20 percent of our contribution, into an incentive program,” Frasher told city directors at last week’s agenda meeting.
The contract doesn’t require membership for the city on the partnership’s executive board, a provision city directors had considered adding.
“We really didn’t discuss that,” McCabe, referring to the meeting he and Frasher had with partnership CEO/President Gary Troutman, told the city board last week. “We’d only be one vote on the board. That doesn’t mean a lot, per se. I think Gary understands what our positions are.”
Troutman told city directors last week that quarterly reports will be general in nature, as nondisclosure agreements with businesses looking to locate or expand into the area prohibit him from revealing specifics about recruiting activities. He did share that he’s working to market Hot Springs as a five-county Metropolitan Statistical Area, rather than the one-county area recognized by the U.S. Department of Commerce.
Troutman told the board expanding the city’s MSA, which comprises only Garland County, to include Hot Spring, Pike, Clark and Montgomery counties will make it more competitive when courting new industries.
He told the quorum court earlier this year that the Office of Management and Budget, which designates MSAs, said commuter traffic between the five counties isn’t significant enough to warrant expansion. Troutman said the city can still market itself as a five-county metropolitan area, even if it’s an unsanctioned designation.
“It allows us to be in front of a site consultant and say we have a metro of 175,000,” he told the city board earlier this week. “As it stands now, we’re a one-county metro with only 98,000. It sounds a little more impressive. It gives us an interstate and three four-year colleges instead of one, which is more of an attention-getter.”
Troutman said the partnership will promote the quality of public education in Garland County to recruit families from Little Rock after the widening of Highway 70 east is completed this summer.
“There’s a lot of Little Rock families paying private school tuition,” he said. “I think it would be a lot more attractive for them to consider Hot Springs. We have the quality of schools here that they pay dearly for their kids to attend in Little Rock.”
The 2018 contract doesn’t stipulate the city’s payment is consideration for a contract for services rather than a contribution to the partnership, which receives contributions from its private sector members. Previous contracts had included that language, but voters passed a legislatively-referred ballot measure in 2016 that allows local governments to provide money to private interests for economic development.
The state Constitution previously prohibited local governments from providing money to corporations, associations, institutions or individuals. Prior to the passage of the Amendment to the Arkansas Constitution Concerning Job Creation, Job Expansion and Economic Development, a Pulaski County Circuit Judge ruled in a lawsuit brought against the cities of Little Rock and North Little Rock that payments they made to their respective chambers of commerce without a contract enumerating the services provided violated the state Constitution.
The partnership shares staff, office space and a chief executive officer with The Greater Hot Springs Chamber of Commerce and reimburses it for administrative expenses.