May 26, 2014 22:04 Ascension economic development group facing cuts Ascension economic development group facing cuts Council cut agency’s funding by 75% by ellyn couvillion| email@example.com May 26, 2014 Comments GONZALES — Ascension Economic Development Corp. officials are considering how to retrench in the face of a 75 percent cut in funding from the city of Gonzales. Gonzales Mayor Barney Arceneaux said he’s considering vetoing the budget the council passed in a 3-2 vote this month because of the drastic cut to the AEDC and other issues. But meanwhile, the AEDC finds itself looking at new budget figures halfway through its fiscal year. With a staff of three, “there’s no fat in our budget,” said Mike Eades, president and chief executive officer. “The proactive marketing, the strategic initiatives may have to be cut back.” The nonprofit AEDC receives most of its funding, about $322,000, from the Ascension Parish government. Its second-largest source of revenue until this month was $100,000 from the city of Gonzales, which the council has slashed to $25,000. Gonzales Councilman Terance Irvin, at a council meeting on April 28, had proposed amending the city’s general fund budget to reduce the amount the AEDC was receiving by $75,000. Irvin, who could not be reached for comment, had said he wanted to reallocate the money toward funding for an $800,000 study of an I-10 service road between La. 30 and La. 44. Gonzales operates on a fiscal year from June to May, so its severely downsized funding for AEDC is to take effect June 1, when the city’s new calendar year begins. The AEDC, on the other hand, operates on a calendar fiscal year and is nearing the halfway point in its budget. The result of the reduced funding from the city may be a scaleback in projects underway, Eades said. One big project currently in the works is the identification and certification with the state Department of Economic Development of potential sites for new development in the city and parish. Certification means the property has been screened for such issues as environmental, archeological or wetlands conditions. The AEDC has been looking at more than 20 such properties, all more than 25 acres, with six of them located in Gonzales, Eades said. “It gives you an advantage,” said William “Bill” Dawson, chairman of the AEDC Board of Directors. “Let’s say this guy (a new business) is looking in Texas. We’re able to move quickly” to compete. The AEDC has been planning to hire a national consultant — and last month put out a request for proposals from consultants — to use the data from the site certification project to create a diversification strategy to bring other types of employers to Ascension, in addition to the petrochemical industry. “We’re exporting a third of our labor force every day” to work sites outside the parish, Eades said. “The downside to the out-commuting is that people tend to shop where they work — we’re exporting a lot of buying power out of this parish,” he said. A more diverse base of employers in Ascension Parish would be a way to change that, Eades said. Now, however, that type of proactive work may have to be put on hold, he said. The AEDC receives funding from the city of Gonzales on a quarterly basis and has received to date $50,000 for this year’s budget. It now anticipates receiving $12,500 from the city for the remainder of the AEDC’s fiscal calendar year, Eades said. The Ascension Economic Development Corp., chartered in 2005 to grow business activity in the parish, began operations in 2006 as a public-private partnership, with public funding and a board that included private sector members. The action of the Gonzales City Council this month to reduce funding for the AEDC rolled the figure back to the city’s initial contribution amount eight years ago, when the nonprofit economic development corporation had just been formed. The Gonzales City Council voted in 2006 to provide $25,000 to AEDC for operating expenses, an amount it approved annually until 2009, when funding was increased to $100,000. Mayor Arceneaux was newly elected at that time and lobbied for the increased funding. “I ran on economic development, to get new businesses and get new jobs for our people,” Arceneaux said. “I thought it would be best to up it (funding for AEDC) to $100,000” and the council at the time agreed. In addition to funding from the city of Gonzales and Ascension Parish, the AEDC also receives money from the Baton Rouge Area Chamber and the Industrial Development Board of Ascension Parish Inc. The annual budget of AEDC is typically in the range of $430,000. Dawson said the city of Gonzales has probably gotten $8 returned for every dollar it has invested in the nonprofit corporation, in the form of new or expanded businesses. From its founding to the present, the AEDC can point to 22 projects it directly assisted in locating or expanding in the city of Gonzales, Eades said. All of the projects together, some of which are underway, represent a projected total of more than $329 million in capital investment in the city and approximately 1,000 new jobs, he said. An example of its work, said Eades, was the AEDC’s assistance with Tanger Mall and the city in creating an economic development district at Tanger, which generates new sales tax income for the city. The AEDC also worked with the Gonzales location of Emerson , a Fortune 500 electronics manufacturer, to help it move from a site in the city it had outgrown to a new location, where ground was recently broken, in the Edenborne Development on La. 44. The location of Emerson’s new site also helps it take part in a federal program called the New Markets Tax Credit Zone program, which provides tax credits for businesses meeting certain criteria, Eades said. Arceneaux said Thursday that he may veto the amended general fund budget, as well as the amended capital outlay budget that also passed by a 3-2 vote. If Arceneaux vetoes the budgets, the five-member council would then need four votes to override the veto, at its next council meeting on May 27. If the veto stands, the city would operate on 50 percent of last year’s budget until a new budget is arrived at, City Clerk Clay Stafford said.