City cites low return on investment; County government considers a similar move sometime in the next month
FARMERSVILLE – Few businesses in Farmersville closed during the pandemic, an achievement most surrounding cities would tout as an accomplishment. Unfortunately, the flip side of the argument is that Farmersville didn’t have a lot of business to begin with.
It’s the main reason the city of Farmersville rejoined the Tulare County Economic Development Corporation (EDC) in 2018. The primary focus of the EDC is to generate leads, convert them to clients and assist them in locating opportunities in Tulare County. The ultimate goal is to facilitate new businesses locating in the county.
The only problem is there hasn’t been much activity in Farmersville, according to Mayor Greg Gomez.
“We haven’t had any development here, so there has been no return on our investment,” Gomez said. “Nothing has really changed in the last two years.”
Gomez said his decision to leave the EDC was also based on a governance structure that would diminish, and some years eliminate, Farmersville’s vote on the board. At its April 22 meeting, the EDC presented a new formula that gave a seat to one elected official from every public entity contributing more than $10,000 to the EDC, which would include the County and the cities of Dinuba, Porterville, Tulare and Visalia. Members contributing less than $10,000 (Farmersville, Exeter, Lindsay and Woodlake) would share a single seat that would rotate annually among representatives for each city. Farmersville was set to be first in the rotation for the 2020-21 year, but that didn’t score any points with Gomez.
“It was pretty egregious,” Gomez said. “They want our money but not for us to have any say in the direction of that money.”
Farmersville’s representative on the board, councilmember Paul Boyer, said he was hopeful something could be worked out so that the county would remain in the EDC without sacrificing representation from each local government. Boyer was the lone dissenting vote in Farmersville’s 3-1 decision to leave the EDC, as Councilmember Tina Hernandez was absent. Farmersville’s membership for the 2020-21 year would have been a little more than $3,100.
“I know it’s a meager amount, but just keeping it in the budget means we do some promotional things on our own, like a chamber of commerce,” Gomez said.
The formula was pitched as a compromise to increasing the county’s contribution to 40% of the public-sector budget but increasing the voting power of the county’s representative. The change would have given the county’s vote 16% of the public vote instead of its current 11%. While elected members from all of the cities opposed the idea, including Boyer, Woodlake Mayor Rudy Mendoza was the most outspoken.
“I don’t like having a gun pointed to my head,” Mendoza said.
It may not matter after comments made by the Tulare County Board of Supervisors last week. During its May 5 meeting, Supervisor Amy Shuklian, who represents the county on the EDC board, said her opposition to changing the EDC’s structure had little to do with governance and everything to do with the county’s cost more than doubling from about $44,000 to over $90,000 while many other agencies were seeing a decrease.
“What’s being held to our head when we are getting a huge increase?,” Shuklian said in response to Mendoza’s comment. “At this rate, I can’t support being in the EDC anymore. It’s not being cost effective to me.”
Paul Saldana, President and CEO of the EDC, said the formula is reviewed by the county administrator/city managers group every three years and set to expire this June. He said the formula was based on population and sales tax revenue prior to the county leaving the EDC in 2013. After it left, the city managers group decided to add property tax revenue into the mix and Visalia ended up paying a higher share. Under the new formula, the county would pay the highest percentage among the public members.
“It didn’t come up in conversation at all, that this was why the county left in the first place?,” Supervisor Dennis Townsend asked.
County Chief Administrative Officer Jason Britt said he did voice that concern with the city managers but he only represented one vote on a nine-person committee.
“The city managers’ mindset was that if economic development happens anywhere in the county, the county benefits. They are correct but to what extent,” Britt said. “There are sharing agreements with cities for revenue depending on where development lands. Went back to drawing board a few times and this was ultimately what was decided.”
Shuklian, who was a proponent of the county rejoining the EDC in 2017, said her issues with representation on the EDC Board were not in regards to the overall voting power of the county, but rather its lack of representation on committees. She said the county did not have a seat on the administrative committee that came up with the new governance structure and none of the public agencies were invited to sit on the EDC’s newly formed Recovery Task Force.
“Cities and counties are the biggest contributors yet there is no one who sits on these committees,” Shuklian said.
Saldana did clarify that there is a public sector seat on the administrative committee that has been empty for three years.
“This is the first I’ve heard about it,” Shuklian said.
Mike Washam, associate director of the county’s Resource Management Agency, said the EDC will continue to struggle until it changes its core structure to address the contradictions in funding levels and needs between small cities and large cities and between its public and private partners.
Chairman Pete Vander Poel said he has been on the board since 2009 and the EDC rarely goes more than three years without a major problem between its members. He said Saldana has promised for several years to find more funding from the private sector in order to have a more equitable public-private partnership, but Washam pointed out that the private sector only contributes $25,000 to the public sector’s $227,000.
“We keep coming back to the same place,” Vander Poel said.
Vander Poel instructed Washam to come back with a formal recommendation for a vote prior to the start of the EDC’s fiscal year on July 1.