Works Board OKs funding for economic development

The El Dorado Works Board approved last week two funding requests totaling nearly $1 million to continue a contract to support economic development services for the city of El Dorado and to operate and maintain a cityowned amenity.

Board members met March 22 to hear presentations from the El Dorado-Union County Chamber of Commerce ($45,000) and the Murphy Arts District ($900,000, $100,000 of which was already approved for 2021).

Chamber

The board first heard from the Chamber of Commerce, who presented a $45,000 funding request for its annual contract with the city to provide economic development services.

In a lengthy presentation, Bill Luther, president and chief executive officer of the chamber, walked EWB members through a multi-page proposal and addressed a question that he said he often hears from the community.

Since 2017, the city has approved an annual contract for services of $45,000 with the chamber.

In late 2018, El Dorado City Council members voted 5 - 2 to decrease the contract for services to the original $30,000 funding level that was allotted prior to 2017.

The decision, however, was short-lived. After further discussions and negotiations, the $45,000 funding level was restored a few weeks later.

Council Member Dianne Hammond, who made the motion to return to the $30,000 contract, noted that the amount lined up with Union County’s annual contribution of $30,000 to the chamber’s operating budget.

The chamber does not submit an annual funding request to the county.

Luther referred to the issue March 22, telling EWB members he often hears similar comments from area residents.

He reiterated that the Chamber of Commerce office building is owned by the UCIB and the chamber operates from the building rent free.

“And I always want to talk about that because people, when they see the funding for economic development, they see the city at $45,000 and the county at $30,000,” Luther said.

“But the county makes up its share by providing us with a place to work,” he continued.

The city and county’s contributions made up 24% and 16%, respectively, of the chamber’s 2021 budget.

The remainder of the budget was largely covered by chamber membership fees and events that are coordinated by the chamber.

On March 22, Luther said none of the funding that is allocated in the city contract is used for building maintenance, utilities or business insurance.

“We provide a full-time, professionally qualified project manager and staff to carry out economic development and other services,” Luther said.

In 2021, Luther said there was a 6% percent increase in time dedicated to the contract because of an increase in overall economic development activity, which had been slowed by the coronavirus (COVID-19) pandemic the previous year.

The largest economic development project on which the chamber worked in 2021 was the opening of Continental Carbonic Products, Inc., — a dry-ice manufacturing facility, which is adjacent to El Dorado Chemical Company, — in El Dorado.

Luther said the chamber teamed up with SouthArk to coordinate a job fair for the new company and 50 of 60 available positions have been filled

He added that the project had been under way since 2019 when the Arkansas Economic Development Commission directed the CCPI project toward El Dorado.

The chamber also operates and maintains the city’s Go El Dorado and Grow El Dorado web

sites and is working with the Diamond Agency on an ongoing project to update, enhance and integrate the websites.

Last year, the El Dorado Advertising and Promotion Commission voted to dig into its reserve coffers and fund the first phase of the project with a commitment of up to $40,000.

An oversight committee then sent out requests for proposals (RFPs) to eight advertising/marketing/ branding firms and after narrowing the submissions down to two firms, the committee selected Stone Ward, who developed the Go El Dorado site in 2005 - 2006.

The Go El Dorado site contains information about the city, including municipal services, the history of and facts about El Dorado, economic development opportunities, entertainment, shopping, recreation, places of worship local businesses, etc.

Grow El Dorado provides much more detailed information that is of interest to business prospects, including maps, photos, infrastructure, transportation, demographics, workforce data, daily traffic estimates, local and state incentive packages, city codes, permits and ordinances and more.

The goal of the rebuild is to combine the websites under the single domain name of goeldorado.com and modernize and expand online content and capabilities.

Luther said chamber’s active membership roster increased from 528 at the start of 2020 to 555 members now.

EWB chairman Greg Downum inquired about the chamber’s total revenue for 2021.

Luther said revenue roughly totaled $382,000 for the year.

Expenses were budgeted at $379,000.

“It came in quite a bit under that because we have expenses putting on events and we didn’t put (some of) those events on. If you look at a profit and loss statement, our net profit was approximately $32,000,” Luther said.

Luther also reminded EWB that the chamber received funding last year from the federal Paycheck Protection Program, a component of the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The loan was forgiven last October, Luther said.

“Without that, we would have been in bad shape,” Luther said.

“I’m trying to understand what’s the relationship, if any, between the overall profitability of the chamber and the amount of the funding request?” Downum asked.

“Thinking, maybe, you could decrease that to get it more, to break even?” EWB member Craig Mobley interjected.

“I’m just thinking about over time,” Downum said.

Luther said the chamber typically maintains a cash balance of $70,000 - $100,000, depending on the time of the year, and in February-March of 2021, that balance had dropped to $17,000 prior to the chamber receiving the PPP loan.

In 2021, the chamber requested an additional $10,000 for the city contract for services.

At the time, Luther explained that while chamber staff members dedicated more time to serving the city’s economic development interests in 2020, the coronavirus (COVID-19) pandemic had slowed overall activity for much of the year, including fundraising efforts.

As a result, the chamber fell short of its fundraising goals and income projections, and asked the city for a $10,000 boost to help offset some of the revenue shortfall and to cover additional work that the chamber put in on behalf of the 2020 contract with the city.

After considerable discussion, the EWB agreed to fund half of the $10,000 increase, under the proviso that chamber return in mid-2021 with a report so that EWB members could evaluate the potential for approving the other $5,000.

However, the EWB’s consideration was not necessary because of the PPP loan.

MAD Playscape

MAD also returned to the EWB regarding its contract for services to with the city to manage, operate and maintain the city Playscape — an amenity in the MAD entertainment complex.

The city owns much of the property that makes up the MAD entertainment complex — including the Playscape on Hill Avenue — and leases it to MAD for a nominal fee.

Last year, MAD asked to enter into a three-year contract for $1.2 million, $400,000 per year, with the city in an operation and management agreement for the Playscape.

The request was part of a three-pronged funding package that included the sale of Oil Derrick Park, which is adjacent to the First Financial Music Hall and MuleKick@ MAD restaurant, to city for $890,000 and a $422,341 reimbursement for monopoly infrastructure expenditures that were incurred by MAD for upgrades to city-owned infrastructure in and around the MAD complex.

The request came with matching funds from Murphy USA.

The city council agreed to pay out the O&M contract for the Playscape at $400,000 in arrears each yearly quarter, starting in 2021.

Last year, the Playscape was open for seven months from June until December and reportedly drew 19,926 visitors.

“If you annualize that number, that’s just over 34,000 people that are using that asset of the city’s on an annual basis, so I think that’s a very compelling statistic,” said Pam Griffin, MAD president and CEO.

The splash pad closed down in the fall as temperatures began to drop and the playground remained open until the end of the year.

MAD officials reported that 2021 operations came in at $300,000, $100,000 under budget, and ongoing expenditures are $350,000 for the Playscape.

Last year, Griffin requested a revision to the O&M agreement requesting $300,000 for 2021 and $400,000 for 2023.

She explained on March 22 that the request included the $100,000 remaining from the 2021 budget.

The 2021 proposal came an additional $200,000 to operate the Playscape in 2024.

Expenditures are projected at $350,400 per year through 2024.

The amount of the latest funding request will exhaust the 12% of the El Dorado Works budget that is dedicated to MAD.

On March 3, Griffin told EWB members that MAD is planning for a Memorial Day weekend opening of the Playscape and needs lead time to prepare for the opening.

She noted that landscaping expenditures increased in 2021 because landscaping was not performed on the property while it was shut down in 2020 because of COVID.

On March 22, EWB treasurer Sara Coffman inquired about a $1,901 expenditure for legal fees in 2021.

Griffin explained that some of the fees are tied to the lease agreement with the city and others are for issues that periodically crop up at the Playscape.

She noted that the previous week, a man had said “some inappropriate things to some teenage girls” at the facility and MAD employees are trained to deal with such situations when they arise.

Capital expenditures for the Playscape this year call for additional rubber mulch to cover the playground ($15,000); repairs and sealing for the concrete ($10,000) in the splash pad area; painting and repairing the fiberglass on the slide ($12,000); repairs and maintenance to the chemical system ($1,500); replacing lounge chairs ($2,500); and repairing and painting the fence ($5,000).

Griffin said $26,800 will remain in the budget as needed for other such issues that may crop up during to the year.

The rubber mulch is a continuation of work MAD began last year to replace rotted, wooden mulch on the playground.

Griffin and Coffman noted the $77,000 expenditure. Griffin said the cost included six truckloads of the rubber mulch and installation, which was approximately $15,000.

“I would love to see us cover that whole concrete splash pad with that Life Floor; however, that’s about a $100,000 expense,” Griffin said, referring to the slip-resistant flooring that is underneath the razorback play feature at the Playscape.

She said MAD officials also learned the lounge chairs will have to be replaced more often than they thought, explaining that MAD originally bought “some pretty, expensive fancy” lounge chairs which lasted two years.

“Lounge chairs just get destroyed out there. They get thrown around …,” Griffin said.

Coffman said she feels parents and guardians should bring their own chairs.

“We can do that. It just provides a better amenity for our out-of-town guests and those that are traveling to have a better experience there than having to sit on the concrete,” Griffin said. Coffman also suggested benches “to make them something that you don’t have to redo all the time,” and Griffin said MAD could look into the idea.

The funding requests will be forwarded to the city council for consideration.

If approved by the city council the MAD funding request will exhaust the line item that is dedicated to “Festival City” development in the El Dorado Works plan.

The initiative is funded by a one-cent, city sales tax that is geared toward projects that enhance economic development, municipal infrastructure and quality of life in El Dorado.

Festival City development makes up 12% of revenue from the tax, which went into effect in October 2015 and will sunset in 2025.

The council is scheduled to meet at 5 p.m. April 7.