A proposed change in the way the city pays its share to the Economic Development Corp. (EDC) of Elkhart County is drawing objections from the organization, although a “fee for services” contract is not out the ordinary, observers said.
This story by Matthew Straw originally appeared in The Elkhart Truth.
Mayor Tim Neese, in his 2019 budget proposal, called for a change in funding, “to see if it would be more cost effective for city taxpayers.”
In the new arrangement, money typically granted to the EDC would instead be allocated to the city’s Economic Development Department, which would pay the EDC a base fee and then additional amounts based on the number of new jobs created or other measures of performance.
Mark Dobson, president and CEO of the EDC of Elkhart County, said the proposed arrangement was more like “fee for project won” than a “fee for services” contract. He called the change a “commission-based approach” to economic development.
Dobson said the EDC board “would not be in favor of that, for a variety of reasons. One is we don’t want to become a transactional entity, where the City of Goshen is competing with Elkhart or Bristol or Nappanee for a project.”
Lee Lewellen, president and CEO of the Indiana Economic Development Association, said many economic development organizations across the state use a fee-for-services model. He cited Steuben County in northeast Indiana and the Economic Development Coalition of Southwest Indiana as examples.
He said governments commonly use such models to contract for engineering or other private services and, “in this case, economic development services.”
