The city council’s finance and budget committee is seeking clarity on how tax dollars are being spent on economic development marketing efforts.
At their Feb. 11 meeting, Councilmember Bob Johnson, the committee’s chair, said he’d requested the agenda item “Review of Economic Development Opportunity Funding.”
Ryan Elum, director of development services, told the committee that $100,000 that is allocated annually for economic development opportunities. He said that funding is used to promote economic development throughout the city through targeted marketing and public relations efforts. The funds are also used for some miscellaneous and administrative costs such as for market studies and title searches.
For fiscal year 2019, about $51,000 of that fund has been spent or allocated. That leaves a little less than $49,000 for allocation through Jun. 30, the end of the fiscal year.
Johnson was pointing to transactions that show the city making monthly payments of $1,600 for marketing services for the Lee’s Summit Economic Development Council (LSEDC). He asked why the city is making those payments instead of LSEDC. He obtained records of the transactions through a Sunshine Law request.
Elum said those fees were in accordance with an arrangement between the city and LSEDC to provide marketing services to reach a regional audience. He said they are a pass-through for a collaborative effort between LSEDC and the city.
Mark Dunning, assistant city manager, added that the agreement was made when the city lost creative services personnel and is now being renegotiated. The contract with the marketing partner is with LSEDC, not with the City of Lee’s Summit. The city has since increased their creative services personnel from one person to five.
Johnson asked whether the arrangement was approved by the city council or if there was any work product to show for the expenses. Dunning said that the agreement had not come to the council for consideration and that staff does ensure that any work done on the city’s behalf is completed as expected.
Johnson also referenced recent property tax analysis that shows residential real property was roughly 81 percent and commercial real estate was 18.8 percent. He says if these numbers continue to remain relatively flat, it doesn’t seem worth the investment of tax dollars toward these marketing efforts.
The committee seemed confused about why funding is being spent through both LSEDC and the Lee’s Summit Chamber of Commerce on top of the city’s own creative services efforts. Dunning said staff is in the process of renegotiating that structure now that the creative services team has been re-staffed, but that the efforts are part of a much larger partnership that also includes stakeholders such as Downtown Lee’s Summit Main Street and Velocity Lee’s Summit.
Mayor Pro Tem Beto Lopez suggested that, while the committee does not want to micromanage city staff, these processes be “ironed out” before the next budget cycle process begins to ensure clarity of process and that there isn’t duplication of work.