Uneven returns
Study by League of Women Voters of city economic development spending finds lack of focus, deficiencies in reporting and accountability
Money spent by the city of Santa Fe for economic development programs has been widely scattered and lacked a clear focus, with a large chunk going to organizations or programs that never filed a report or no longer exist, according to research by the Santa Fe County League of Women Voters.
In fact, half of the top 10 groups that received allocations of $10,000 or more since 1997 no longer exist. One of them, Grace Communications, received $400,000 over several years to organize Santa Fe Design Week, which has also folded. Clean Air Systems Inc. received $300,000, and was then purchased by Caterpillar, which closed the plant and laid off its Santa Fe workforce.
Another organization, the Santa Fe Complex, accepted a total of $369,000 to help the city model escape routes in case of a forest fire, among other tasks. It folded in 2012.
“One of the things that was really surprising to us is that not all of the recipients who received money did annual reports. Some of them didn’t do reports at all,” said Karen Heldmeyer, a former city councilor, who was among the people who researched where the money went.
The city, for instance, funded two different “Buy Local” campaigns over the years, but there is nothing in city archives to show what they accomplished, if anything.
“What we found for the city were a lot of gaps in the records that they keep and what they seem to require from the businesses,” said Jody Larson, who headed the project for the League of Women Voters.
League volunteers attended dozens
of city meetings and interviewed past and current employees, including former department heads. They also combed through data on all spending from the economic development fund going back to 1997.
The city has left vacant the head of its economic development department for six years. Kathy McCormick left the job in 2010. Kate Noble served as interim head, but resigned last year to work at a private startup and now serves on the Santa Fe school board.
The department has five funded positions, but just two full-time economic development specialists. Interviews have been completed for the new department head, and a decision on who will be hired is pending.
“I think it’s fair to say that because of changes in leadership and a lack of adequate staffing over the past decade there has been a lack of focus. There is room for improvement in those areas,” said Simon Brackley, executive director of the Santa Fe Chamber of Commerce, who serves on the city’s economic development committee and was involved in interviewing finalists to oversee the department.
Mayor Javier Gonzales said the new economic development director should start June 1, and there will also be a push to fill two vacant positions.
“Despite the absence of leadership, we’ve made progress,” Gonzales said. “The push to grow jobs and create investment in our city has not stopped.”
The League of Women voters recommends ways of achieving better accountability, including:
Grant applicants being required to identify costs and benefits of projects, as well as a time frame and itemized budget.
Recipients having to provide annual reporting on their program.
Requiring long-term results to be documented and retained by the city to provide a historical context for future efforts.
“There needs to be a plan, and it needs to be done with community input and updated with community input,” Larson said. “Everybody thinks what they do serves economic development, and a lot of them are sincere about it.”
Heldmeyer said many of the recommendations are simply good business practices.
Volunteers did not try to measure the outcomes of those receiving money, but that is a legitimate concern, Larson said.
She pointed out that the two largest grantees of the city’s money are the Santa Fe Business Incubator, which has received $3.3 million over the past 20 years, and YouthWorks, recipient of $1.2 million during the past eight years.
The incubator operates a building on Paseo del Sol that nurtures startup companies. YouthWorks provides counseling and job training to disconnected youths.
If there were a greater economic development plan for Santa Fe that focused on infrastructure and job training, how would these groups fit in? Larson asked. Likewise, how many businesses helped by the incubator could survive on their own?
Other grants went to groups that sponsored events. These included Fine Arts for Children, Creative Santa Fe, Warehouse 21, International Folk Art Market, Rodeo de Santa Fe, Council for the Arts and the Santa Fe Independent Film Festival.
The economic development fund “can’t be all things to all people and needs to serve the larger plan,” said League volunteer Neva Van Peski. “Maybe an organization like YouthWorks is worthy, but the question is whether it should be funded out of money intended for economic development. I think the fund needs to focus more.”
The city’s economic development office has a $1.5 million budget and allocates about $800,000 in grants and contracts. Revenue comes from other grants, city leases and property rentals, as well as the gross receipts tax.
One of the city’s permanent employees, Ross Chaney, economic development specialist, was out of the office last week and could not be reached for comment. But he was asked to submit his own report to the council on the department’s efforts as part of the search process for a new manager.
His report shows there is agreement with many of the League findings. Chaney cites the need for a wider planning effort and more accountability on grants.
“There are systemic problems that have impeded the effectiveness of Santa Fe’s economic development efforts and reduced the impact of prior plans,” Chaney wrote in his report.
He added that Santa Fe’s vision for economic growth must be linked to overall city goals and there needs to be “communitywide accountability for implementation.”
Mayor Gonzales said he doesn’t question the investments made at the Incubator or YouthWorks, but agrees there needs to be more planning. He said that will happen with the new hires.
He said the city needs an economic development policy that nurtures everything from early-childhood education to housing and infrastructure, such as broadband, so businesses can thrive and retain employees.
The mayor also sees an obstacle. “Until we’re able to solve the deficiency on affordable and accessible housing in Santa Fe, it’s going to be difficult to attract the talent that we need,” he said.