Thursday, April 30, 2009 | A pricey and controversial contract for marketing and economic development is being chopped during the next budget cycle as the mayor aims to shift more responsibility for attracting businesses to city staffers.
Mayor Jerry Sanders’ proposed spending plan for the budget year starting July 1 includes $50,000 for the San Diego Regional Economic Development Corp., a big drop from the current year’s contract topping $600,000.
The mayor has proposed adding a manager to absorb some of those responsibilities who would receive a $100,000 salary and $44,515 in benefits. But the city’s independent budget analyst has questioned the need for adding such a high-priced position considering the city’s falling revenues. The mayor has also proposed boosting the economic development budget by $50,000 for non-personnel expenses.
Rachel Laing, a spokeswoman for the mayor, said EDC asked for $50,000 for the upcoming budget cycle, presumably recognizing the city’s tight finances. The city also is ending its other major economic development contract with San Diego World Trade Center, which focuses on international business and is slated to receive $69,790 this budget year.
Laing said the mayor is proposing adding an in-house position because drawing businesses to San Diego is an especially high priority given the recession.
“The mayor has put a new level of emphasis on job creation and retention,” Laing said.
The city’s current contract with the EDC raised eyebrows because the city continued to shell out big bucks for the contract as the city made cuts such as shedding skate park supervisors and eliminating trash cans from oceanfront locations.
As part of the contract, the EDC provides economic development and marketing work, including public relations efforts that have led to national media attention for Sanders.
In March, mayoral spokesman Darren Pudgil said contracts were spared during last fall’s midyear budget cuts, but said the office planned to look at outside contracts for the budget year starting July 1.
Past contracts with EDC have also drawn fire. In 2003, the organization was criticized for paying its chief executive $515,000 a year, according to a Union-Tribune story, at the same time the city was shelling out $1.4 million of the organization’s $3.1 million budget.
Laing said the scaling back of the EDC contract doesn’t reflect unhappiness with the organization. “It wasn’t a commentary necessarily that it wasn’t a valuable service, but it was something that could be cut without service-level impacts to San Diegans,” she said.
The $50,000 that Sanders has proposed paying EDC in the new budget year will cover services such as identifying companies that could be looking to expand and luring them to San Diego and conducting roundtables to make sure local businesses are satisfied, Laing said.
She said the city’s current staff will shoulder a larger burden of the city’s efforts to attract a clean technology cluster to San Diego, which was among EDC’s responsibilities.
Laing said the city will continue its clean tech marketing efforts, but they won’t replicate some of EDC’s efforts, such as hosting a group of reporters from trade publications who interviewed Sanders and subsequently published stories on San Diego’s clean tech efforts in publications such as Energy Current and Renewable Energy World.
However, in the IBA’s review of the mayor’s spending proposal, the office questioned the need for a new program manager. The position would be paid for with hotel-tax money, which is expected to decline next year as the economic meltdown has dented tourism revenues.
“Adding a program manager in this budget environment … is always something that would get our attention,” said Jeff Kawar, a fiscal and policy analyst with the IBA’s office.
Moreover Kawar noted that the city’s eight-person economic development staff already includes four people in supervisory positions, each with more than a decade of economic development experience.
Kawar said it seems that one of the current supervisors would be well-suited to take on the task of figuring out how the city could provide the services now provided by EDC — especially given that one of the major tasks EDC performed was direct companies to appropriate people in the city who could help with their business needs.
Clarification: The original version of this story said the mayor had proposed adding an economic development manager at a cost to the city of $194,515. That figure includes $50,000 of non-personnel expenses unrelated to the new manager, according to the Mayor’s Office. The manager is slated to receive a $100,000 salary and $44,515 in benefits.
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