Officials: Future of Tuscola County hinges on EDC survival (audio)

Thom Bardwell, chairman, Tuscola County Board of Commissioners (Sept. 29, 2016)
Thom Bardwell, chairman, Tuscola County Board of Commissioners (Sept. 29, 2016)

Tuscola County’s economic future hinges largely on success of the Tuscola County Economic Development Corp., but it’s a sentiment few share – a big problem that could yield devastating results if not addressed.

So said Sen. Mike Green, R-Mayville, and several members of the Tuscola County Board of Commissioners on Thursday, during an in-depth discussion on improving the county’s economy and centered largely on the Tuscola County Economic Development Corp. (TCEDC).

For the next fiscal year, TCEDC has requested a 40 percent, or $20,000, increase in funding from the county to “expand its reach” and sell the idea of doing business in Tuscola County to others while continuing to assist those already here.

But the biggest problem facing the TCEDC, the group said, is that it struggles to sell itself at home, largely because it can seldom share the “behind-the-scenes” work it engages in daily.

“We’re struggling with our EDC,” said Thom Bardwell, chairman, Tuscola County Board of Commissioners and EDC board member.

“We need a different approach…there’s got to be some kind of value added that others see.”

TCEDC is a “special-unit agency” of Tuscola County, funded mostly from the county, though additional monies are provided by local units of government, business, and other nonprofits.

It’s essentially a three-person team working to promote the economic success of Tuscola County – involved in everything from park planning and small business loans to retaining the area’s largest employers.

TCEDC has had some successes: Helping Poet Biorefining set up shop in Caro and landing Cass City a plant built by the Dairy Farmers of America are two of the highest profile examples. Most recently, it assisted Scott Romain with his plan for a $1.2 million rum microdistillery/restaurant in downtown Caro (the project status is uncertain as of press time).

But TCEDC operates on a shoestring budget whereby the organization must devote significant amounts of time to survival instead of actual economic development – a difficult process when you can’t thoroughly make the case for increased funds.

“In one sense, we have our hands tied because we can’t talk about anything,” Bardwell said. “You say nothing about nothing so the value is nothing and nobody knows what’s going on so (others raise the question of) ‘Why do we need the EDC?’”

The ever-outspoken Green put it bluntly.

“You’d be dead without it,” Green said to the board. “Who’s going to go out and try to draw businesses? You? No.

“If you don’t have someone on the phone, when someone calls up and says ‘Hey, we’d like a building in Caro, do you have one?’ Someone has to answer that phone and say ‘Yeah, we got an empty one right here.’”

“Lapeer, Bay, Genesee, even Huron County…if you don’t have somebody here that is working to improve businesses in Tuscola County, the other EDC directors and committees around this county will suck us dry,” Green said.

“Absolutely,” Bardwell said. “We know that. But most people don’t.”

 According to its website, “The Tuscola County EDC is a non-profit organization that is dedicated to raising the quality of life in Tuscola County through economic development.”

Currently, it is led by Executive Director Steven Erickson, Communications Director Vicky Sherri, Office Manager Glen Roth, and a 19-member board that meets monthly (the meetings are open to the public).

Founded in 1982 by a group of local farmers, TCEDC is not a 501(c)(3) nonprofit in the traditional sense, like the Tuscola County Community Foundation.

This spreadsheet shows the contributions of local units of government to the Tuscola County Economic Development Corp. (Click image to open)

An introduction to the balance sheet obtained by The Advertiser contains a more in-depth description than the TCEDC website. 

“The Tuscola County EDC’s mission is dedicated to retaining and creating jobs in Tuscola County. The EDC continues to strive in fulfilling this mission by providing assistance to all business segments in Tuscola County including retail, service, commercial agricultural processing, and manufacturing.

“The EDC is a special-unit agency established by the Tuscola County Board of Commissioners to help small business owners and entrepreneurs develop business ideas and to help sustain local businesses with the goal of job retention and creation.”

The Tuscola County EDC Equipment Lease Fund, by example, provides local small businesses with equipment for business operations. Since inception, several businesses have become part of the program, which has had total receivables of more than $103,000.

The EDC website indicates the organization measures success through number of:

  • Jobs created and retained
  • Business retention calls made
  • Businesses counseled
  • Requests for information handled
  • Businesses assisted with loans and loans made
  • Value of grants attracted
  • Self evaluations by board members and staff.

The Advertiser asked Erickson for numbers on each of the above bulletpoints for 2015, but they were not readily available.

A typical day for the EDC begins between 7 a.m. and 8 a.m. and could go as late as 10 p.m.

On just about any given day, Erickson and Sherry are meeting with local officials (city or village managers, for example), attending local council meetings in the evening, meeting with local chamber of commerce officials, providing “small business counseling” to local entrepreneurs, and/or managing the EDC’s loan program, which requires thorough evaluation of business plans, equipment, and buildings.

They could also be preparing large packages for companies from outside the region that want to know more about Tuscola County: average wages, details about available infrastructure such as roads and utilities, tax rates, available tax abatements and more.

Concurrently, Roth manages the EDC’s building in Caro.

Funding for the Tuscola County EDC primarily comes from local governments and contributing businesses.

In fiscal 2015, TCEDC received more than $76,000 from local units of government (including $50,000 from the county) and more than $64,000 from contributing partners. By comparison, in fiscal 2010, TCEDC received more than $100,000 from local units of government, but only about $16,000 from contributors.

Erickson said TCEDC contacts local municipalities in the early part of the year with details about what kind of funding the EDC seeks. It then returns in the fall for a formal request.

For example, the TCEDC recently asked Caro for $8,500 for the next fiscal year.

Caro City Council members, however, voted to stick with the $5,000 it had allocated to EDC in the previous four years. (In April, Caro City Council also voted against awarding TCEDC a contract to write the community new park plan).

“We had already budgeted $5,000 for the EDC,” said Joe Greene, Caro City Council member.

TCEDC financial records show the majority of its expenditures are for wages and to cover an “independent contractor” (Sherry), who bills the EDC hourly, Erickson said.

In fiscal year 2014, the Tuscola County EDC spent $91,587. Of that, $57,269 went to wages and $14,757 to the independent contractor. The remaining $19,561 covered costs such as supplies ($606), telephone ($1,298), and promotion ($375).

In fiscal 2015, the Tuscola County EDC spent nearly $23,000 more on wages ($64,501) and the independent contractor ($30,520). Again, what was left went toward operational costs, such as supplies ($1,078) and promotion ($446). Erickson said Sherry’s pay increased year-over-year due to more hours being worked.

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Sen. Mike Green, R-Mayville, addressing the Tuscola County Board of Commissioners on Sept. 29, 2016 (Photo by Andrew Dietderich)

Through a deal with Bear Management L.L.C., which owns the EDC’s building in Caro, all office operational costs are donated to the EDC (covered by rent paid by business incubator companies). That means the TCEDC will cut costs further. 

So why is the organization asking for increased funding?

“We want to expand our reach,” Erickson said. Specifically, he said, TCEDC wants to increase its presence at industry conferences around the country.

“We’re going to write a budget that includes (the increase) so they can see what we want to spend the money on,” said Christine Young, an EDC board member. “We don’t want to say ‘We need $20,000, just give it to us.’”

One consensus at Thursday’s county board meeting was that TCEDC needs more money so it can focus appropriately.

“We need to be at a level where we can focus more fully on those things that give us the best opportunity to advance Tuscola County and show value in some meaningful light to others,” Bardwell said.

Tuscola County Commissioner Tom Young pointed to a conference about a year ago in Leamington, Ontario – near Port Huron – where roughly 50 companies were looking for partners for value-added agriculture products.

“Our EDC director couldn’t go…we didn’t have the money to send him,” Young said. “St. Clair County was there…Genesee, Lapeer…you think they were going to put a good word in for Tuscola County? No.

“I think we lost a lot of business by not sending somebody.”

Erickson said people who benefit from the TCEDC – essentially the entire area – need to understand the value of the organization, even if it isn’t plastered all over billboards, online, or in newsprint.

Part of the discussion Thursday, for example, addressed the issue of local agriculture-related businesses not stepping up to carry their weight, even though many benefit through work of the TCEDC.

A list of contributors printed by the TCEDC about a year ago, in fact, did not contain any farms or farmers.

“And maybe that’s the issue – they don’t value EDC either,” Bardwell said.

Erickson said the community also needs to instill a certain amount of trust that the EDC’s only interest is in advancing the economy of Tuscola County, he said, and appreciate the need for non-disclosure of most deals (at least in the earlier stages).

“I give out as much information as I possibly can while protecting the interest of the companies we work with,” Erickson said. “We’re a service business, just like any other service business, and the companies we work with are the boss.

“We can’t dictate to them anything. We’re there to assist them.”

(Listen to the entire 30-minute discussion by clicking play below.)

Andrew Dietderich is editor of The Advertiser and can be reached at andrew@tcadvertiser.com

 

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