[Editor's Note: This is part 2 of a multi-part series of articles on the Grant County December work session and regular session.]

By Mary Alice Murphy

After a short break between presentations at the Grant County Commission work session on Dec. 15, 2020, the commissioners welcomed virtual presenters Adam Hughes, chief executive officer of Better City, and Eric Gibson, senior analyst, who presented an Economic Development and Funding Opportunity in Grant County.

"We've been working on economic development and funding support for Silver City and the larger community," Hughes said. "We are working to determine what economic development looks like in Grant County and in growing what we already have through several functional areas:  Workforce development has been a significant issue for just about every employer. You have a strong entrepreneurial spirit here, and we need to continue to foster that. The next is placemaking, which is where people want to live, work and play. It is critical to retain employers and their workforce. Business retention and expansion, we've been visiting with to work with businesses to support what they want to do. The last is outdoor recreation. The county is blessed with its location close to the Gila National Forest and all the outdoor recreational opportunities it offers. It is truly an amenity to attract and retain a skilled workforce. Our intended outcome is to raise incomes, improve quality of life and create local wealth.

"We have to look at economic development to sustain itself," Hughes continued. "In the past it has been cyclical. People get excited, they get a grant, do the work, then the grant ends and there are no resources to implement the work done. It repeats itself. I've seen it in just about every rural county we've worked in that rely on grants. Economic development cannot be sustainable if it's cyclical. The community needs to get together, determine the needs and support the group with resources and growing capacity over time."

He noted that prior efforts have had starts and stops. "We need to determine what works by asking who is ultimately responsible for economic development in Grant County, what dedicated recurring resources exist for economic development and how can we create a sustainable program for economic development." 

District 2 Commissioner Javier "Harvey" Salas said there is no one assigned to keep it going. "I would like to see follow up and us staying the course."

District 5 Commissioner Harry Browne said no one is ultimately responsible, but it should not be just one person. "We don't live in a centrally managed society. We live in a free-market society. We need different actors with important roles who also have a role to play in different directions. For instance, I'm interested in outdoor recreation."

District 4 Commissioner Billy Billings asked if it was a trick question on who is responsible. "The responsibility role is of city, county, state and federal entities to be business friendly so businesses can function. It's the responsibility of business owners and entrepreneurs to run their own businesses. When the government decides what is needed it's hard to find someone to run a business. That's a long way around to say I agree with what Commissioner Browne said."

Hughes said he appreciated the comments and what he heard was not just one person should be driving the efforts. "A lot of scaffolding can be created in a rural area, but you need someone or a group to guide things."

He said the many stakeholders had worked toward an organization with a focus on workforce education through the existing educational entities. 

Hughes said a Local Steering Committee for Economic Development and Workforce Development was started in 2019. It has grown from about 15 members to more than 40 regularly attending members. An LLC was established in July for the Grant County Workforce and Economic Development Alliance and non-profit designation is in the works.  Information on the organization can be accessed at https://gcweda.org .

A slide of the presentation lists some of the members, which includes Grant County. Other sectors involved include Silver City, the Mining District, Higher Education, Primary/Secondary Education, Finance, Healthcare, Tourism/Hospitality, Natural Resources, Manufacturing, Ranching and Agriculture, Non-profits and Entrepreneurs.

A strategic plan for the GCWEDA for the next four years focuses on seven industries: aerospace and mechanical engineering, computer/software engineering, cybersecurity/IT, finance, healthcare, manufacturing, natural resources, ranching/agriculture/forestry and tourism. The plan will direct workforce development activities and provide funding sources through the Workforce Innovation and Opportunity Act. The plan was created in partnership with the school districts, Western New Mexico University, large employers, local entrepreneurs, nonprofits and the Southern Area Workforce Development Group. The plan can be downloaded from the GCWEDA website. 

The group received an EDA grant for $626,500 for three years of funding guaranteed January 2021 through December 2023. The EDA provided $500,000 and local resources, including the county, WNMU and others gathered the matching funds.

The basic budget is $375,500 for three years of funding for the GCWEDA for a director, supplies materials, travel and marketing. $168,000 is set aside for business retention and expansion, working with the Chamber of Commerce, which Hughes said has been a great asset and partner. $101,000 is for business services with the WNMU School of Business and the International Business Accelerator for an export training certificate program and funds to support their virtual business accelerator, Studio G, which has received national recognition for its success, and local business services. They have been active with capacity for local businesses over the past few years.  

Hughes said the grant funds make it sustainable over the next three years. He noted that the alliance consolidates and leverages efforts from stakeholders around the community region, with low to no duplication of efforts. "We want to have the conversation now on how to make it sustainable. We don't want to get all this momentum to lose it. How should funds be used? The stakeholders have determined the money should be used for workforce development, entrepreneurial infrastructure, business retention and expansion, placemaking, outdoor recreation, and there may be other initiatives."

He said the annual cost to run the organization is $120,000-$150,000. Ways to pay for it are through sponsorships, LEADS funds, other loans/grants, which should be minimal, benefactor(s), and the GRT option. He discussed sponsorships, which ranged from $500 to $5,000 a year, but they did not feel it was sustainable. "Plus, we don't want to be in competition with others that rely on sponsorships/memberships. LEADS funds from New Mexico are competitive and not that large. We could probably use a combination of all these possibilities. Other loans or grants could be a mix of competitive and non-competitive funds. Ideally, we could have a benefactor come in and put down $3 million, which with a dividend of 5 percent could provide $150,000 annually. A lot of benefactors are focused on education or training. The last one is the gross receipts tax option, which seems the most sustainable. New Mexico passed House Bill 479, which de-earmarked gross receipts taxes and allows for a one-eighth percent allocation to economic development activities. It could be approved without a referendum and could generate $600,000 per year with current revenues."

He said the if the county passed such a tax, the agreement could stipulate accountability. "About two-thirds of the gross receipts tax could go directly to the organization, but the county could also use it for other projects through community stakeholder input. What I've seen in other communities is the county or municipality passes a tax, and over time it gets used as an account of pet projects. You want to avoid that risk. With the organization, it would be used for operating funds and to implement projects and also could be used as leverage for grants. The most important part would be the organization reporting regularly to the commissioners. The timing for such a gross receipts tax ordinance would require it being passed and sent to the state by the end of March so that it would go into effect July 1."

He encouraged a strategic planning process involving stakeholders. 

Hughes went through several case studies. The first compared Superior, Wisconsin, with Duluth, Minnesota. Duluth grew its tourism base, while Superior used it for pet projects and pilfered the funds away.

Moffat County, Colorado, had an organization for 20 years, but they struggled and finally dissolved last year. There was no movement because the organization was not executing the right way.

Another case study showed efforts in Sheridan, Wyoming, which lacked coordination, so efforts were being duplicated. The organization was not set up the right way, and there were no metrics or accountability.

"I want to show how important the organizational structure is," Hughes said. He posted a slide of Regional EDOs (economic development organization) in New Mexico. The graph showed Roosevelt County, Deming/LunaCounty, Cibola County, Las Vegas/San Miguel County and the Middle Rio Grande economic development groups.

He presented a slide of key takeaways, which included using the funds for catalytic projects and initiatives, highly leveraged; making use of the funds so they are sustainable and targeted with mission alignment; the organization/executive director needs to be held accountable; the organization should build its corpus over time for increased capacity and diversified revenues streams; and making it successful by structuring it appropriately at the beginning to make it sustainable.

During the discussion, Priscilla Lucero, Southwest New Mexico Council of Governments executive director, said in her 30 years in the COG, she has seen highs and lows. "I compliment Grant County for applying for this EDA grant."

She said the most successful programs have been those that invested in their own communities. "I think that was the reason why Grant County was awarded this EDA grant. They've seen what we've done, so they wanted to invest in us. I was asked by the review committee how we plan to make it sustainable. And they liked what they heard."

District 3 Commissioner Alicia Edwards said she has been talking about using GRT funding for some of the county's projects. "I said we have $150 million in dreams, so I appreciate your bringing up the GRT option. One of the things I did on a back-of-envelope calculation is that if we're spending $150,000 a year, what's left could be invested, with the idea that if the GRT sunsets in 20 years, we would have built up an endowment so that it wasn't the tax supporting the organization, but the interest would be supporting it. Yes, we would have to hold the executive director accountable and would need a good board. We have to acknowledge how challenging it will be to create something sustainable, accountable and beneficial to the community."

District 5 Commissioner Harry Browne said he believes developing the workforce is a very important role for government. "Is there any room to have sustainable funding from Western (New Mexico University) and the schools, because they are highly relevant to this?"

Hughes said Western has contributed matching funds for the grant. "We would definitely have the schools on the board. The purpose of the alliance is to access funds and school districts can apply for funding and provide help. It's important how we can all work together to make the applications the best they can be."

Browne said he was thinking an annual financial contribution commitment from each group to complement the funding from the county and the municipalities.

Hughes said those conversations would be had by the board.

Lucero said one of the things from her perspective was the membership part, which she has for the COG. "I think businesses and entities will be willing to contribute what they can afford. It will take every piece to work."  

Browne said he should have said at the outset that he supported the effort and that he is looking at ways that could make it sustainable. "My next question is about the availability of increments."

County Manager Charlene Webb said the county does have a 1/8th of an increment that would generate about $600,000 a year based on its current GRT collections. It can be used for various things. "What we've proposed is for it to support economic development for the alliance and other similar projects. The increment is not indefinite. Typically, it is for 20 years, but it could be renewed."

Edwards said it would be done by ordinance, and "we could write into the ordinance for how long. Can we put in the ordinance to require commitments?"

Webb said the ordinance would not be the appropriate place to put it. "The structure of the organization is created through bylaws and agreements between the county and the organization that the funds would be used for these initiatives and that this alliance is the one that drives the actions. You would not want to tie yourself down to what this commission wants today. We would have to determine how to draft the ordinance. Linda (Vasquez, financial officer) and I have been in contact with David Montief, who is our tax liaison with the state, to help us craft the ordinance to meet the purpose of what we want to do and be acceptable to the state."

Edwards asked if the EDO were a non-profit, would the bylaws, if changed, have to go through the IRS.

Webb said that was above her pay grade, but the structure has been done.

Gibson said the bylaws have been finalized and are on the website. The county will have a permanent seat on the board and the bylaws will be reviewed in January. 

Hughes said he believes accountability is critical. "There has to be accountability through the agreement , including showing metrics and reporting how the executive director is doing. That is control the county has. A lot of these can be put into the agreement. We haven't gotten that far."

County Planning and Community Development Director Michael "Mischa" Larisch noted the non-profit status would be a 501c6, not a 501c3.

District 1 Commissioner and Commission Chairman Chris Ponce worried if the county has only one seat on the board and the county decides to go with the GRT option, "we would have only one vote."

Browne said it took him a long time to find the resources on the website, so he said to those who might be searching for them, they are in a folder on the bottom right called File Archives. "That's where you find the bylaws and the strategic plan. If anyone was thinking about the state anti-donation clause, there is an exemption for economic development organizations. I'm philosophically opposed to using the GRT to build an endowment. It is too similar to the state Permanent Fund, so maybe we could find another source to build the endowment."

Edwards said her idea was that as soon as they got to the $3 million amount for the endowment, they would stop putting GRT funding into it.

Browne said it didn't change his mind. "It would be removing options to use the funding now."

Edwards said she was just trying to think of some way to permanently create sustainability.

District 2 Commissioner Javier "Harvey" Salas said he agreed that economic development should be at the top of the list. "Our economy still depends on one industry. What worries me is the efficacy of any organization. When the money dries up, the organization goes poof. If we're going to pour more of our own money into a GRT, it hits all of our pocketbooks. If there is anything we can do to partner with the copper company to try to bring in cottage industries. The only industry we've grown is he retirees' community. If we were to consider the GRT, I would want a strict structure. I think raising the GRT would be a barrier to getting other industries to come into the county. I think we need to look at every other funding opportunity before we go to the GRT, especially if we have only one vote into what is going to be done."

District 4 Commissioner Billy Billings said he had way too many questions and would try to do his homework.

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The next article will go into the county reports.