Borough budget could bring cuts, increase for nondepartmentals

Next Tuesday night’s Kenai Peninsula Borough Assembly meeting could bring cuts or increases to the borough’s three economic development programs.

The Kenai Peninsula Economic Development District, the Kenai Peninsula Tourism Marketing Council and the Small Business Development Center all receive economic development funding from the borough, which is not obligated to fund the programs but has for years.

This year, Borough Mayor Charlie Pierce’s initial budget proposed giving each $100,000. That would have been $206,000 less than last year’s fiscal 2018 budget for the Kenai Peninsula Tourism Marketing Council, but $25,000 more for the Kenai Peninsula Economic Development District and $16,000 more for the Small Business Development Center.

At at the assembly’s May 15 meeting, Hal Smalley successfully amended the budget proposal to increase funding for the Kenai Peninsula Tourism Marketing Council back to $306,000 and left the other two as proposed.

Assembly President Wayne Ogle and members Norm Blakeley, Ken Carpenter and Paul Fischer voted against the amendment.

“The borough’s investment in tourism and marketing is not a donation to a nonprofit,” Smalley said at the meeting. “The investment is a contract with a marketing agency providing marketing for the Kenai Peninsula Borough. Now is not a time economically to see a big change there. This investment drives business and sales tax dollars.”

The assembly can still make amendments before passing a final budget at its June 5 meeting. Kenai Peninsula Tourism Marketing Council Executive Director Summer Lazenby said she was optimistic that if Pierce vetoes Smalley’s amendment, at least six assembly members would vote to override it, keeping the greater amount.

“If six out of nine don’t end up coming through and overriding the mayor’s veto, there’s going to be some very, very difficult decisions,” she said.

The tourism marketing group was originally part of the Kenai Peninsula Economic Development District, but became its own entity as the peninsula’s tourism industry grew. Its budget comes from a mixture of member fees and borough funding, but it receives no state or federal funding, Lazenby said.

The organization does not claim to be the sole reason why the the Kenai Peninsula attracts so many visitors — by last count, more than 500,000 out-of-state visitors and many in-state visitors that were not surveyed or counted — but is responsible for at least some of them through its website, social media and print media efforts, Lazenby said. People may not identify the Kenai Peninsula Tourism Marketing Council as the source of their information, because they don’t place their brand on their marketing, so visitors may not be able to name the organization when asked, she said.

“Alaska does have amazing things that draw people here, but we need to draw them to the Kenai Peninsula,” she said. “There was talk at the last assembly meeting about filling our budget gap on the backs of tourists. I would love to fill that budget on the backs of visitors … but it’s going to take marketing to draw more visitors here.

The assembly cut the tourism marketing council’s funding by 10 percent in the fiscal year 2018 budget. The Small Business Development Center also saw a cut last year, from $105,000 to $84,000, while the Kenai Peninsula Economic Development District stayed level.

The Small Business Development Council regularly advises would-be entrepreneurs all over the Kenai Peninsula, with offices in Soldotna and Homer. The borough’s support complements federal dollars for the organization. Beyond just building business plans, the organization also offers research and financial planning tools not available to the general public, such as IBISWorld.

Beginning this year, the group is looking to hire another business adviser in Seward, in partnership with the Seward Chamber of Commerce and other organizations, said Soldotna center director Cliff Cochran. There isn’t usually enough work to keep a person busy full-time in Seward for the Small Business Development Center, so the position will be shared among the funding groups, he said.

“We’re working on creating a new position that should launch September or October this year,” he said.

The Kenai Peninsula Economic Development District employs just two people — Executive Director Tim Dillon and Programs Manager Caitlin Coreson — but they stay busy. Beyond the annual reports they produce for the borough, they also provide assistance for businesses, coordination between government agencies and an incubator space in a building in north Kenai. Dillon said the extra $25,000 would help them continue getting out to the communities and working with businesses.

“We’re trying to be involved in a variety of different things and be as diverse as we can,” he said.

The Kenai Peninsula Economic Development District is working with the Small Business Development Center on development in Seward on an “entrepreneurial ecosystem center.”

Seldovia City Manager Cassidi Cameron, Homer City Manager Katie Koester and Seward City Manager Jim Hunt wrote to the assembly in support of increased funding for the Kenai Peninsula Economic Development District. Hunt wrote that its work in Seward has markedly improved the business environment there.

“Under (Dillon’s) leadership, we have seen business interest expand and his resources and information are valuable to current and prospective business entities,” he wrote.

The assembly will have its final hearing on the fiscal year 2019 budget at its Tuesday meeting.

Reach Elizabeth Earl at eearl@peninsulaclarion.com.

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