Red Willow County commissioners, at their weekly meeting Monday morning, slashed in half the county's annual membership contribution to the McCook Economic Development Corp.
All three commissioners voted "Aye" to a motion to pay the MEDC $5,000 for 2009-10, rather than the usual $10,000, although Commissioner Steve Downer said that budgeting one amount and pledging another, "is going down the wrong road. It's wrong to budget it and take it out. Take it out next year. That's the time to do it, not now."
Downer said the county "needs to continue to be a member of the EDC."
Commission Chairman Earl McNutt told Rex Nelson, director of the MEDC, that he is still upset that the City of McCook declined to share the additional one-half cent sales tax that city voters approved in 2007.
Commissioners said at that time they wanted to use half of that sales tax to fund improvements and maintenance to county roads. It was estimated that a one-quarter share of the city's one-half cent sales tax would generate approximately $160,000 a year for the county.
The city earmarked the half-cent tax for the MEDC and additional city projects.
Commission Chairman Earl McNutt said Monday that he feels the MEDC is getting enough funds with the proceeds from the sales tax, and he is concerned about funding the MEDC at the county's usual $10,000 membership contribution.
"Maybe tax payers are making a large enough contribution with the sales tax ... that the sales tax is a pretty sufficient amount going into the MEDC," he said, adding that the county's $10,000 could be "valuable for other uses."
Fellow commissioner Leigh Hoyt said he feels the same way, explaining that commissioners had requested a share of the sales tax so county constituents "can have roads good enough to come into town." Hoyt said the county received "no support" from the city or the MEDC in his and McNutt's requests for a share of the sales tax.
"That made both of us sour on the deal," Hoyt said.
Hoyt also said he is upset that the city has raised dispatching and ambulance fees paid by the county. "We get little or no support" for requests of cooperation between the city and county, he said, explaining that the county wanted to build a joint city-county law enforcement center, fire station and jail -- which city and county voters rejected -- but that the city is now talking about building a new fire station and public safety center.
"This puts the county behind the eight-ball again," Hoyt said.
McNutt said that although the county receives some highway allocation from the state, the county's primary source of revenue is property taxes. A county is not allowed to impose a sales tax if a municipality already has one, Hoyt said.
"We can only piggy back" on a city's sales tax, he said, adding that he is reluctant to impose a sales tax on Indianola, Bartley, Danbury and/or Lebanon.
Nelson said that he acknowledges commissioners' concerns and noted inequalities, but said that it would have been inappropriate for the MEDC to act as "intermediary" between the city and the county on the sales tax issue. "Most of your concerns are not the MEDC's responsibility," he said.
Nelson pointed out that the county benefits directly from MEDC projects, and particularly from those that create jobs within McCook.
Nelson said that 31 percent of the county's residents live outside McCook and that 14 percent of McCook's workers commute from outside the county. They rely on McCook for primary and second-income jobs, Nelson said, for salaries and insurance.
The MEDC can help build the county's tax base, Nelson said, explaining that the TIF (tax increment financing) on Valmont Industries comes off in two years, at which time the county's share of taxes will be $58,860. The Nebraska Department of Corrections Work Ethic Camp in McCook employs 81 people, Nelson said, infusing $9 million into the economy and $400,000 in taxes to the county.
Once renovated, the Keystone project in McCook will provide a $3.7 million economic impact, and $200,000 in area taxes.
The MEDC provides 80 hours a year of administration for the county's revolving loan fund program, Nelson said, and training costs $2,500 a year.
"The MEDC needs the county as a partner," Nelson said. "The times and the economy would indicate that the MEDC needs more support, not less."
Nelson told Dorwin Felker of rural McCook, who questioned the purpose of the MEDC, that the MEDC is a non-profit corporation that is supported largely by partners' contributions, such as businesses that "get nothing (in return) except the generation of revenue into the community."
McNutt said the county "hasn't felt that impact." The bottom line is, he said, whether or not to contribute to the MEDC in the usual $10,000 amount, or to contribute a different amount.
Dale Dueland, a member of the MEDC board for three years, encouraged commissioners to examine the county's tax base, where it could be without the business development and expansion of the tax base attributable to MEDC efforts. He recommended that commissioners allow the MEDC to get through one cycle of the sales tax -- which was implemented in July 2008 and that the MEDC started receiving in September 2008 -- before making decisions about the county's contribution to the MEDC.
Leigh Hoyt made a motion to fund the MEDC with a $5,000 contribution for 2009-10, a motion seconded by McNutt. Downer said, "I'm not sure that's the right message we want to send -- that we back out of something we've agreed to."
Nelson said the lesser contribution will have an impact on the MEDC budget, which will have to be adjusted for the reduction in funding.
The motion passed, 3-0.