City cuts contribution to Chamber by $15K

City officials have voted to support the El Dorado-Union County Chamber of Commerce with a $30,000 contract for services next year, cutting the city’s 2018 contribution by $15,000.

However, Mayor Frank Hash and members of the El Dorado City Council noted that the amount could be amended later. Mike Dumas, president and chief executive officer of the chamber, is expected to appear before the council Dec. 20.

On Dec. 6, the council voted 5-2 on a motion made by Council Member Dianne Hammond to approve $30,000, contingent upon a member of the council being appointed to the chamber’s advisory board.

“Which is what we asked last year,” Hammond said referring to the advisory board spot.

With the vote for the $30,000 amount, the council bucked a recommendation by the El Dorado Works Board to fund the 2019 contract at a level of $45,000.

“What is your reason for cutting $15,000?” Blann asked after Hammond made the motion.

Hammond said the $30,000 fell in line with the Union County Quorum Court’s annual contribution to the chamber.

“That sounds pretty weak to me. I would not be in favor of that,” Blann said.

She referred to comments Dumas made Dec. 4 when the chamber presented the $45,000 funding request during a specially called EWB meeting.

Funding requests for the city’s economic development tax are first presented to the EWB, who administers the tax, for a vote. The EWB then forwards the request to the city council, who has the final say on the matter.

“The chamber of commerce does not does not ask the quorum court what amount. The quorum court says this is the amount that is given to them. That’s what Mr. Dumas said,” Hammond said just prior to making her motion.

Contract

For several years, the city has contracted with the chamber to act as the city’s economic development arm by providing such services as:

• Planning, marketing and strategic advice and counsel to the city regarding job recruitment, development, retention and expansion.

• Developing secure tools for the purpose of economic development prospects, such as maps, charts, photos, brochures, reports and other matters, as are necessary and required to adequately promote new and expanding industry within the city.

• Developing a business retention and expansion program.

The city has previously funded the annual chamber contract at levels of $25,000 and $30,000.

In 2015, the city suspended the contract, which was funded for $30,000 at the time, due to a Circuit Court ruling in Pulaski County that said such arrangements between cities and chambers of commerce violated the Arkansas Constitution.

The ruling stemmed from a lawsuit that had been filed against the cities of Little Rock and North Little Rock for similar contracts with respective chambers and economic development organizations.

At the time, Hash said he wanted to wait for a final court ruling on the matter before considering the reinstatement of the chamber’s contract.

In December 2016, city and local chamber officials learned that an Arkansas voters had approved a Constitutional Amendment during the General Election the previous month, authorizing cities to pay chambers of commerce or other organizations to provide economic development services.

The city then restored the chamber’s contract,

increasing the amount to $45,000 in the 2017 city budget and maintaining the same funding level in 2018.

‘We would have to close the doors’

On Dec. 4, EWB member Greg Downum inquired about the annual budget of the chamber and the services the chamber provides for the city.

“In other words, what’s the return on investment?” Downum asked.

Mike Dumas said the chamber’s annual budget is $366,000, which is covered by the city’s $45,000 contribution, $30,000 from Union County, chamber membership fees and events that are coordinated by the chamber, including the El Dorado Christmas Parade and the chamber’s annual meeting.

Dumas said a portion of the budget is dedicated to maintenance of the chamber office building, which is owned by the Union County Industrial Board, a public facilities board that works with other regional economic development partners to assist in the economic development process.

The board offers local incentives to prospective businesses that are considering expansion within or relocation to the community.

The UCIB used to kick in about half of the chamber’s annual budget, but within the past several years, the board has taken a significant financial hit as several funding sources dried up — including business and industry closings —, leaving the board with less operating cash.

Less operating cash also made it difficult for the UCIB to develop, maintain, repair, sell and lease commercial and industrial properties it owns.

Hash, Dumas and Brandon Barnette, economic development project manager, said the chamber office building serves as a space to meet with business/industry prospects, existing business/industry and other groups with tie-ins to economic development.

Groups also hold board meetings and other events in the chamber building.

Barnette also told Downum that the chamber courts and fields business prospects and maintains the city’s Grow El Dorado website, which contains information about available commercial properties, infrastructure, demographics and other information that is of interest to businesses and industries, national retailers and restaurant chains who are interested in moving to El Dorado.

Additionally, the chamber works with the Arkansas Economic Development Commission and area schools, colleges, universities and industries to help improve the area’s workforce, Barnette and Dumas said.

Downum said he did not think expenditures for the office building fell “into the economic development bucket.”

Dumas said the city’s contribution is also used to fund salaries for chamber staff, which has been reduced in recent years in response to a decrease in revenue from the UCIB.

“You want to know how critical $45,000 is? Without that those funds, there would there would be no chamber of commerce. We would have to close the doors,” Dumas said.

Following the meeting, Downum also noted that the quorum court’s contribution to the chamber is $30,000 and that the court does not field a funding request from the chamber.

The EWB voted 3-1 on the chamber request. Downum voted no and EWB member George Calloway abstained, citing his position on the city council.

Calloway is filling an unexpired term for the Ward 3, Position 2 seat. The term sunsets Dec. 31.

Like the EWB, city council did not vote unanimously while deliberating the matter Dec. 6.

Hash asked the council to consider the $45,000 request, with the proviso that the amount can be adjusted later.

He noted that Dumas could not attend the meeting because the El Dorado Christmas Parade, which was scheduled the same night.

“I suggest we take (EWB chairman Robert Reynolds’) recommendation and wait until we hear from Mike Dumas … We owe Mr. Dumas the courtesy of hearing him out,” Hash said.

Blann and Council Member Michael Rice voted no on the motion for $30,000. Council Member Mary McAdams was unable to attend the council meeting.