Privatizing EDC: Backers try again

December 10, 1999

Three years ago, the Hagerstown-Washington County Chamber of Commerce put together a proposal called "The Prosperity Partnership" to turn the county's Economic Development Commission into a private organization.

Howard County's EDC had done the same thing two years before to free itself from political contstraints and allow it to raise funds on its own.

But after appointing a blue-ribbon panel of business leaders who recommended that Washington County do the same thing, some of the commissioners had second thoughts, saying that regardless of who's in charge of economic development, the public would hold them responsible for what does or doesn't happen in that area.

In addition, County Administrator Rodney Shoop said he wanted to make sure that when hot prospects contacted county government that he would be able to tell the EDC chief to meet with them.


And so the commissioners voted 4-1 in November 1996 to retain the old structure and hire a new director.

It took them almost another year to do that, but now now that a North Carolina native named John Howard is in the director's chair, his board has decided that they want to try to go private again. Suzanne Hayes, who chairs the board, explained why in a Dec. 3 speech to the Hagerstown Exchange Club.

The issues cover four areas, she said, including: supervision, personnel, funding and the perception of the EDC's clients.

"There's too much ambiguity in the supervision now," Hayes said. It often isn't clear whether employees are directed by the county government, by the EDC board, or by both, Hayes said, adding that the jobs EDC people need to do don't fit neatly into the jobs descriptions the county government provides.

Because the EDC is tied into the county government budget, there are constraints on the amount of money EDC can pay to some employees. Hayes said that because EDC's marketing people are essentially salespeople, they could go into sales in the private sector and make more than they're making now.

County government also has a "rigid job hierarchy," Hayes said, which "makes it tough to do an incentive pay plan that works."

As for funding, Hayes said, privatizing EDC won't relieve the county of the responsibility to fund it, but would allow it to do fund-raising with private business in a way that's not possible now.

Few businesspeople will volunteer to give bthe government extra money, Hayes said but other organizations in communitiers similar in size to Washington County are successful in getting private firms to fund most of their costs.

For example, in May 2000, EDC has planned a "Celebration of Business" to acknowledge the contributions of the firms that are here now. Somehow, Hayes said, funds will have to be raised for that because there's nothing in the budget for that now.

The funding issue also involves the need for a fund that the EDC can access quickly to close a deal without going through multiple meetings on the subject, Hayes said.

Such a fund could be a revolving loan fund for new and existing businesses, or outright grants, if such are justified, she said.

As to the perception problem a local government has in promoting itself as a location for business and industry, Hayes says that prospects often tell EDC employees thaqt they're promoting the county because they're being paid to do so.

In contrast, Hayes said, a private-sector employee promoting the county can say "We're here because we want to be."

The structure EDC needs is one that will "enable us to tell our story to anyone who listen, be agrressive in getting back ton theb businesses that contact us for help and compulsive in our follow-ups." she said.

That includes help for firms that have already set up shop here, she said, "because our first interest is to the existing businesses."

Hayes closed by saying that conventional management methods of measuring progress (number of projects completed, etc.) don't work with EDC, which she described as "not a science, but an art."

It makes sense to me that identifying a prospect as right for this area, then matching that firm with the right site and the proper financing is something that requires a combination of accumulated knowledge, salesmanship and financial ability

But will the commissioners agree to it? Maybe. Except for Commissiomners' Presiden Greg Snook, there's a whole new cast of characters of the county board, and they don't seem to have that "any jobs are good jobs" attitude some members of the last board were burdened with.

But to agree with the idea of less control over an agency you're still being asked to fund and which has so much to do with the community's future, well, let's just say I don't think it' a done deal yet.

Bob Maginnis is Opinion Page editor of The Herald-Mail.

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