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Teton Valley Business Development Group Requests 75K

Nonprofit Teton Valley Business Development Group Requests 75K in Operations and Maintenance (O&M) Funding from the County

Representing the Teton Valley Business Development Center (TVBDC), Lynda Skujins, requested $75,000 from the Board of County Commissioners to help their group form a development center and implement their plan of advising local businesses and creating incentives for light industries to move here. Many counties have such a center, and Teton County's government needs one in order to be eligible for state funds.

Commissioner Rinaldi expressed her strong support for the group’s efforts and noted that economic development is her top priority as chairman. She commended them on their recent economic recovery summit. Years ago, past Teton County Commissioners established an economic development center, but it was defunded by previous administrations and she was curious to know why. Kerry Buxton (a member of the business development group) noted that back in the boom time, it fell by the wayside because it seemed like no one could do any wrong with investments. Rinaldi responded by noting the irony that back in the boom times, government was told to “get out of the way,” whereas now government is being asked to bailout the sinking local economy with taxpayer funds.  

As a point of reference, the amount of money requested by the TVBDC for five months of operation is almost as much as the county has budgeted on the Comprehensive Plan process – and there are many member of the public who do not believe government should be in the business of funding nonprofits.

Can the County Give Funds to a Nonprofit?

As a general rule, public agencies cannot gift funds to anyone, but they can contract for goods or services as long as the expenditures comply with the public purpose doctrine. There are also rules on the size of funds given. First off, allocations of over $25,000 must go through a procurement process as required by law, which means putting the position out to bid. This is done for good reason: the county wants your tax dollars to hire the best candidate or organization for the job. If the proposed structure of the TVBDC were to call for one or more of the center’s staff becoming a county employee, there are additional processes for determining a commensurate wage. The proposal that was presented to the Commissioners at this meeting called for funding a nonprofit center with salary for one full time executive director at a rate of $50,000 in addition to a part-time staffer.  

Rinaldi strongly emphasized that the largest allocation that the county has made for a nonprofit in the past is $8,000 to the animal shelter – which was done to compensate the shelter for impounding stray animals.  Generally, the county has contributed much smaller amounts in the neighborhood of $1000-2000, which typically match funds earmarked for a specific project with a direct public benefit.  

Does Teton County have the Money to Fund This?

No. In the county’s $100,000 emergency contingency fund, only about $18,000 remains for the last five months of the fiscal year.  The rest of the money has been allocated for emergency needs throughout the year. Commissioner Park noted that this is precisely the trouble with Teton County’s exceptionally low tax rates – there simply isn’t the money to pay for these kinds of programs. While this project is a great idea, and the county wholly supports it, he has remaining questions as to how this center would be run and where the rest of the money would come from.  This thread of the discussion brings up an interesting question:  

Just How Low Are Property Taxes in Teton County?

It turns out, we have some of the lowest taxes in the state!  According to the Idaho Tax Commission, out of the 200 incorporated cities in Idaho, here is how our 3 cities rank in terms of 2010 county and city taxes combined:

•    Tetonia – 182 out of 200 cities
•    Driggs – 180 out of 200 cities
•    Victor – 176 our of 200 cities

Out of the 44 counties in Idaho, Teton County ranks 40th on the property tax scale. But here’s another way to look at it:  A house assessed at $200,000 in Driggs would have paid about $315 in 2010 for city property taxes. In comparison, that same house would have paid:

•    $457 in Sugar City,  
•    $1,947 in Pocatello,  
•    $1,776 in Idaho Falls,  
•    $1,428 in St. Anthony,  
•    $744 in Rexburg, and
•    $776 in Preston (home of Napoleon Dynamite!)

As for property taxes outside the city limits, a house assessed at $200,000 in Teton County would have paid $481 in 2010 county property taxes. To compare, that same house would have paid:

•    $893 in Madison County,
•    $793 in Bonneville County,
•    $803 in Jefferson County, and
•    $581 in Fremont County.

Does the County Have a Strategic Economic Development Plan?

Not right now. VARD asked the commissioners if the county would be willing to consider potentially contributing to the creation of a strategic economic development plan that included participation and funding from the county as well as the three cities in our valley.  If that sort of collaborative approach were taken, there would be a potential role for TVBDC to implement that plan.

Rinaldi indicated that while county funds are tight, that is the kind of joint project funding that county typically supports. However, Lynda Skujins emphasized that the county does not need such a plan, but rather that the county needs a development center up that is up and running as soon as possible. Anne Callison (also with TVBDC) added that the TVBDC has already done a lot of legwork for development of their own plan and that it can be written later.

What Happens Next?

It’s not entirely clear, but the commissioners encouraged the group to familiarize themselves with the county’s revenue, procurement and budget processes so they could make a budget request during the commissioner’s upcoming 2012 fiscal planning session. Rinaldi also advised the group to implement a nonprofit start up plan, which includes diversified fundraising beyond just asking the county for full funding. In the meantime, the TVBDC has requested that the county conduct an audit of their emergency contingency fund.

VARD agrees that the creation of an economic development center in Teton County is a step in a positive direction, but it is premature to move forward with a center without a clear vision for how it shall be established and a county-wide strategic economic development plan. Should the economic development center be run as an independent nonprofit (as proposed here) or established as an office of the county government?

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