Transitioning from the AEDA (Archuleta Economic Development Association) to the Pagosa Springs Community Development Corporation (PSCDC), the group appears prepared to hire an executive director as it determines its new direction.
The AEDA has been meeting at least once a week over the past month since it decided to become a Community Development Corporation (CDC) in late January, and has taken steps to change its tax status, bylaws and the composition of its board.
Once the transition is complete, the PSCDC will begin the task of searching for an executive director to head the corporation.
With a new Tax Identification number secured earlier this week, the AEDA should be prepared to take the final step in becoming the PSCDC. Distinction between the two is not inconsequential.
Having existed as an Economic Development Association (EDA) over the past 20 years, the AEDA was limited in its focus — almost exclusively business development and support — as well as limited in its ability to pursue grant funding. As such, the AEDA relied on membership dues (from various local businesses) and local government funding and, because of its nonprofit 501(c)(6) federal tax status, was unable to secure state or federal grants in order to invest in economic development projects.
A CDC, on the other hand, has a much wider scope and can address a variety of issues associated with economic development: affordable housing, childcare availability, education (early childhood education and workforce training), small business assistance (providing loans, grants, technical assistance and other incentives), infrastructure and amenity development (to encourage businesses to move here) and “nonprofit incubation” (i.e. helping to establish local nonprofit organizations).
Funding for a CDC also comes from banks as a function of both corporate policy and federal regulations. Under the Community Reinvestment Act, large banks are obligated to specify funds for a CDC and, in return for that funding, receive tax credits.
Because a CDC retains a 501(c)(3) federal tax status, it is eligible for a range of funding, from state and federal grants to federal entitlements, to a variety of funds available through the American Recovery and Reinvestment Act (ARRA). In addition, the tax status provides a CDC with numerous tax credits and exemptions — membership dues are tax deductible, as are donations from private or corporate donors.
That change in federal tax status, as well as federal mandates for banks to support CDCs, has several implications locally. Whereas an EDA lacks resources to provide substantial capital for business development, a CDC would be able to draw upon numerous funding options to encourage new business.
Last Friday, meeting at the AEDA office, the board determined how it would handle AEDA assets as it planned the transition to becoming the PSCDC. With over $180,000 in liquid assets, spread over various accounts, the PSCDC is prepared to take over those assets as soon as the state recognizes the corporation.
During a joint town/county meeting last Thursday, Archuleta County Commissioner (and AEDA board member) John Ranson reported on the AEDA’s fiscal health, the progress being made in the transition to the PSCDC, and the need for commitments for funding from local businesses, as well as commitments from the town and county.
“The county has budgeted $10,000,” Ranson said. “We’ve had discussions with our finance director, who is very tough. We can come up with more ... we do have to cut some to come up with it.”
Answering concerns from the town (that agreed to commit $50,000 to the AEDA for 2010), Archuleta County Administrator Greg Schulte explained that, in order to match the town’s level of commitment, the county would have to search its coffers to come up with additional money to commit to the AEDA/PSCDC.
“Statutorily, once we adopt a budget, we have very little leeway,” Schulte said. “We don’t foresee unanticipated revenues in any other stream.”
“The $10,000 is there,” he added, “the commissioners have said they want a bigger commitment.”
The funding commitments at issue would pay for an executive director. In fact, at the AEDA’s meeting last Friday, the board agreed that, once the PSCDC is up and running, the first order of business would be to hire an executive director to run the corporation.
At that meeting, Pagosa Springs Town Manager David Mitchem stated that he had viewed several examples of resumes for CDC executive directors and that the talent was out there — the PSCDC only needed to decide what it was looking for.
While the board briefly discussed the desire to look locally for talent, it was agreed that whoever was hired needed to provide a proven track record of economic development.
“If we get a good executive director, he or she will pay for themselves,” said Pagosa Springs Mayor Ross Aragon.
Within the next few weeks, the PSCDC will begin its search, advertising locally but also searching globally for a CDC executive director.