NUEDC fate hangs in balance
NEW ULM — The fate of the New Ulm Economic Development Corporation (NUEDC) could be decided tonight at the Public Utilities Commission (PUC) meeting. The PUC is considering a motion to eliminate funding for the NUEDC and to include a budget allowance in the 2018 PUC budget to provide partial funding of an assistant city manager position.
In 1996, the city and the PUC began funding the NUEDC. The 2017 contribution was $50,000 from both the city and PUC. The increase for 2017 provided NUEDC was approximately 10 percent over the request from 2016. The city’s contribution is capped at $50,000 by state statute.
During the Sept. 5 City Council meeting, the council passed a motion by a 3-2 vote to eliminate the 2018 funding for NUEDC and to reallocate funds toward establishment of an assistant city manager position. The assistant city manager would be tasked with economic development activities as a major component of responsibilities.
Historically the NUEDC has performed economic development outreach, but recently members of the City Council have felt these activities have shifted to the city, specifically in terms of the industrial land acquisition and development of land.
Council President Charlie Schmitz is leading the charge to bring economic development “in house” at City Hall.
At the same time the assistant city manager position has remained unfilled since 2011, and the duties were dispersed to other staff and department heads. Schmitz has favored filling the position for years and believes now is the time to make the change.
In addition to bringing economic development back under city responsibilities, it would allow for succession planing, the argument goes. Councilors want a second staff member in place with knowledge of various department if City Manager Brian Gramentz retires.
According to past funding splits between the city and PUC, the PUC would assume responsibility for 20 percent of the assistant city manager position expenses, not including benefits. With the added economic development responsibilities, it is anticipated that the percentage will be 50 percent.
News of this change surprised many members of the NUEDC board. The city has been subsidizing the NUEDC for 20 years and no meeting was held with the council and the board before the vote came before the council.
At the Sept. 5 meeting NUEDC Board President Jeff Dittrich expressed concerns this shift could hurt economic development.
Asked about the upcoming PUC vote, Dittrich was uncertain of the outcome. He said, “We have heard different stories over whether the PUC can fund us by statute.”
Another complication is the makeup of the PUC commission. PUC Vice President William Swan and PUC commissioner Shannon Hillesheim also serve on NUEDC board. Dittrich was uncertain if they were allowed to vote on this issue or would be forced to abstain.
Depending on the vote, the NUEDC board will need to make difficult decisions in moving forward. Dittrich said Economic Development Coordinator Brian Tohal’s position will be first consideration. Without the $100,000 funding from the city and PUC, his position is in jeopardy.
“Do we keep Tohal on as full-time or part-time? Do we dip into our reserves?” Dittrich asked. “A lot of it will depend on the PUC’s decision.”
Whatever the city’s decision, Dittrich said the NUEDC is committed to working with the city to promote economic development in New Ulm. He believes the organization has a strong reputation. “Our track record speaks for itself,” Dittrich said. “For $100,000, the city gets a lot of bang for its buck.”
The PUC meeting begins at 4:30 p.m. at the District 88 Middle School board room. Visitors are advised to enter the building from the Garden Street entrance.
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