Town and city governments are faced with a dilemma. Their local economies are undergoing stress and change, while the competition for new jobs, tax base and internal investment grows. They want to be effective growing their local economies and providing new opportunities. However, they are also under severe budget pressures. Their existing costs are increasing, while state aid – and local acceptance for higher taxes - declines. They cannot afford not in invest in their economy, but can’t afford to, either. How may a community invest less, and still get results? Is there a “third way”?
A third option is available: to contract for community and economic development services. Possible contractors include:
Local Chambers, Regional Planning Commissions. Regional Economic Development or housing organizations with existing professional staffs
Local economic development not-for-profit corporations, if staffed
Public entities, such as community colleges or state agencies
Private entities that have Economic Development Project Management capabilities
For an indefinite period - or as a way of transitioning to a full-time capacity - contracting could be the best option for some communities. Here’s why.
Costs: A town can decide what it can afford, and stop there. Any alteration requires joint contractual sign-offs.
Growth: A community may elect to start small, and see how it goes before seeking full-time funding. A successful contract can be expanded over time, as the Economic Development Project Manager works more, or assigns additional personnel. A part-time employee may not want to move to full time. If full-time is their goal, they might prematurely jump to another job, requiring the town to start over.
Specialization and Networks:
We have identified ten core competencies that a local economy development initiative should have, or should have access to, which you can find by clicking here: http://www.arnettdevelopmentgroup.com/index.php?page=how-we-help
No one can do it all. A community might find someone with one or two of these skills. The other skills should be met from the network of federal, state and other-local practitioners, as well as with other professionals in related fields such as finance, design and planning. An experienced employee might bring their network to a community, but experience is expensive. A less experienced –but more affordable – employee might mistakenly try to do it all, learning-as-they-go. These can be expensive lessons.
Conversely, a contracted Economic Development Project Manager “lives” off of their network; they must collaborate with their peers regularly. Their experience in a particular area – such as brownfields development or incubator start-up – is valuable to others too. Competitors are regularly also collaborators.
Efficiency: Innovative economic developers are beginning to package the full range of core skills, by having key subject matter experts onboard “virtually”. This minimizes the learning curve for complex development opportunities within the community. Most key projects require a team approach. A community may be looking for a person, but be pleasantly surprised to be getting a whole team.
Focus. A contracted Economic Development Project Manager is just that, a person or group focused on assigned projects. A key part of any contract is to determine the deliverables. A community can decide what is important, when they need results, and what it will cost to achieve these results.
But….There are downsides to contracting. Costs can escalate if too many projects are assigned; prioritization of tasks is a key. The on-site presence is less, so there isn’t always someone there to answer a question or to join an ad-hoc meeting. Close collaboration and communication with either the Manager or Planning Director is needed, to keep the Project Manager updated, and be alerted to possible political “land mines” locally.
Permanence: A new employee – while less experienced – may stay for many years. Having someone with institutional memory and community connection is important. If grooming a long-term successor is a goal, then that becomes a deliverable; to help build the community and peer support network for an eventual permanent employee. The contractor is working to successfully replace themselves, but is still available as needed later.
Summary: Current public management challenges require new thinking. One trend is to “in-source” economic development for specific projects. If it’s the right fit, it can allow for a less-costly start-up while focusing on specific outcomes, and build public support. It is not for everyone, but it might be the “third-way” a community needs.
Stuart Arnett is the owner of Arnett Development Group LLC of Concord New Hampshire. He is also a founding member of the Better Future Alliance. He can be reached at firstname.lastname@example.org