By Abigail W. Adams
The Midcoast Economic Development District’s Executive Committee meeting in Damariscotta April 24 marked Scott Benson’s (right) last day as the organization’s economic development director. Also pictured are former Boothbay Town Manager Jim Chaousis (back) and MCEDD and Lincoln County Regional Planning Commission member John Del Vecchio (left). (Abigail Adams photo) |
The Midcoast Economic Development District’s General Assembly will gather Thursday, June 25 to vote on dissolving the organization – a final step in the process to transfer its federal economic development district status to the Sagadahoc County based Midcoast Council of Governments.
MCEDD has served as the Midcoast’s channel to Economic Development Administration funds for approximately 10 years through participation in the federal Comprehensive Economic Development Strategy, CEDS, program.
The program is one of the primary functions of an economic development district and at the heart of the federal strategy to spur regional economic growth. Due to faltering financial support from counties, MCEDD will not be able to access the CEDS federal planning grant in 2015-2016, which requires matching local funds.
Unable to perform its primary mission, MCEDD’s Board of Directors voted to transfer its designation as an economic development district to the Midcoast Council of Governments, MCOG, in February, reawakening a bitter history between Lincoln County and MCEDD.
A similar resolution to transfer MCEDD’s economic development district designation to MCOG in 2009 sparked a federally mandated mediation between Lincoln County and MCEDD’s governing body, which MCEDD Executive Committee members described as “brutal,” “bitter,” and “ugly.”
Armed with letters of support from Knox, Sagadahoc, Cumberland, and Waldo counties, in addition to Wiscasset, MCEDD has submitted an application to the Economic Development Administration, EDA, to transfer their economic development district designation.
The administration must approve the transfer for it to be official.
According to MCEDD Executive Director Jeffrey Kobrock, it is the first time the EDA has considered transferring an economic development district designation between organizations.
“There’s no precedent for this,” Kobrock said. “There’s a formal process for creating an economic development district, there’s a formal process for dissolving an economic development district, but there is no formal process for transferring an economic development district.”
Due to extensive communications between MCEDD and the EDA, Kobrock anticipates the transfer will be approved and MCOG will serve as the Midcoast region’s new economic development district.
According to Kobrock, both municipalities and their counties will have the opportunity to join MCOG, which has a hybrid membership structure. Counties will be able to receive full representation in MCOG if membership revenue from the county equals 100 percent participation.
MCOG is offering reduced membership fees for new municipalities who wish to join, Kobrock, also MCOG’s executive director, said.
According to Kobrock, typically MCOG charges municipalities $1.50 per capita to join. In recognition the transfer in designation happened quickly, MCOG has decided to extend membership opportunities to Lincoln, Knox, and Waldo counties at a rate of $0.75 per capita for the 2015-2016 fiscal year.
Counties will be considered full members if all the municipalities in their region join, or they fund the remaining amount in dues calculated for the county.
“MCOG is very clearly saying we want to retain all of the support and participation of MCEDD members,” Kobrock said. “We want you to be a part of the economic development district in the MCOG corporate structure.”
According to Kobrock, Wiscasset has expressed interest in joining. However, Lincoln County’s participation in the future economic development district is uncertain.
Ancient history
Lincoln County’s role in the economic development district has been a source of contention since the district was created in the early 2000s. A founding member of the district, Lincoln County paired with Sagadahoc County and the town of Brunswick to create a federally designated economic development district in 2003.
The vision for the district and how it was to be administered were at the heart of the conflict between its founding members, according to Mary Ellen Barnes, economic and community development director for the Lincoln County Regional Planning Commission.
MCEDD received federal designation as an economic development district in 2005 and began participation in the CEDS program to bring federal funds to the Midcoast region. According to Barnes, there was a push by Sagadahoc County and Brunswick early on to merge and undertake all economic development activity under the MCEDD umbrella.
Lincoln County resisted, Barnes said. According to Barnes, as a largely rural county, Lincoln County believed its economic development needs were different from the needs of Sagadahoc County and Brunswick and wanted to maintain its own economic development organization.
“There was a fear we would toss all our money into a big pot and not get any return,” Barnes said. “That’s what was underlying all the turmoil.”
The conflict came to a head in 2009 and the EDA got involved. According to a 2009 EDA evaluation, “the board is not communicating well internally, accusations are being made on all sides.” According to the report, Lincoln County was not paying their fair share in membership dues and matching funds to the CEDS grant.
The report resulted in a mandated mediation. “There was no mediation,” John Shattuck, MCEDD Executive Committee member, said at the April 24 executive committee meeting. “It was a mandatory arbitration and it was horrible.”
According to Shattuck, the results were by-laws so onerous all parties involved decided to reject them and simply figure out how to work together. MCEDD expanded its membership to include Knox, Waldo, and Cumberland counties and switched its funding model from a hybrid structure that combined financial support from counties and municipalities to just county support to match federal funds.
The conflict over whether or not to collectively create an umbrella organization for all economic development activity persisted, especially as MCEDD began to expand its scope and focus beyond the CEDS program, Barnes said.
“They [MCEDD members] were coming from a totally different point of view,” Barnes said. “They believed in a larger entity and we weren’t really on the same page. We had different visions of what it means to work together.”
Lincoln County check returned
MCEDD failed to convince the Lincoln County’s budget advisory committee to provide MCEDD with its full funding request in recent years. For the past two years, the budget advisory committee recommended the county zero out funding for MCEDD.
Budget advisory committee members felt the only services MCEDD provided were a duplication of what the county already received through the Lincoln County Regional Planning Commission, according to The Lincoln County News archives.
Against the budget committee’s recommendation, the county provided MCEDD with partial funding in both 2014 and 2015 to remain in good standing with the CEDS program, Lincoln County Administrator John O’Connell said.
Lincoln County’s appropriation of $8,000 was tied to MCEDD’s project proposal to organize workshops to discuss connecting municipalities to the broadband infrastructure along Route 1.
MCEDD informed Lincoln County the $8,000 appropriation could not be considered matching funds for the CEDS program and was considered a contractual service.
Knox County also reduced its support for MCEDD in 2015. Due to reduced funding from Lincoln and Knox counties in 2015, MCEDD was unable to raise the local contribution needed to match the CEDS planning grant.
In February, MCEDD’s Board of Directors voted to transfer its economic development district status to its fiscal agent and member organization MCOG. The vote was controversial.
MCEDD’s governing body is composed of a board of directors, executive committee, and general assembly. Neither the executive committee nor the general assembly had an opportunity to vote on the resolution.
According to Lincoln County Commissioner Bill Blodgett, a member of the board, there was no discussion of the resolution prior to the vote and the issue was not included on the agenda. The resolution passed 17-2. Blodgett was one of the two members present to vote against it.
John Del Vecchio, a Lincoln County member of the executive committee, objected to the process used to pass the resolution and questioned its legality. “The board’s action was inappropriate and inconsistent with the bylaws,” Del Vecchio said at the April 24 executive committee meeting.
Executive committee member Bill Whitten suggested the committee take a vote at their April 24 meeting to resolve the outstanding conflict about the process. The suggestion was heatedly shot down by other members of the committee.
According to Kobrock, MCEDD’s legal counsel has verified the process used to pass the resolution was legal.
Despite the resolution and MCEDD’s preparations for dissolution, Lincoln County sent MCEDD the full $8,000 with “no strings attached.” According to O’Connell, the check was sent in an effort to show Lincoln County’s continued support for MCEDD.
According to Kobrock, the check arrived in the mail with no explanation or discussion between MCEDD and Lincoln County – the check was returned.
Commissioners authorized O’Connell to resend a check for $5,000 to MCEDD at the June 2 commissioners’ meeting. According to O’Connell, Knox County chose to submit a $5,000 check to MCEDD, so Lincoln County chose to follow their example.
“It’s for the CEDS program,” O’Connell said. “That’s what we care about.”
There has never been an EDA funded project in Lincoln County through the economic development district, Kobrock said. The last EDA funded project in the Midcoast region was in 2009. “This shouldn’t be too terribly surprising,” Kobrock said.
“MCEDD is a young organization and unfortunately has been embroiled in a lot of internal politics that have taken time and energy away from the primary mission,” he said. “From now on we’ll be able to spend 100 percent of our resources on our primary mission, which is economic development.”
Kobrock was unaware of Lincoln County’s decision to send a $5,000 check to the organization. According to Kobrock, Lincoln County and MCEDD have not discussed it.
O’Connell could not answer if Lincoln County would retain its membership in the new economic development district. “The only information I have is a total lack of information,” O’Connell said.
