MuskogeePhoenix.com, Muskogee, OK

Local News

June 13, 2014

Proposed change in fund draws fire

Brown wants to halt development account deposit for a year

A proposal to delay or possibly cap deposits into the city of Muskogee’s economic development fund is drawing criticism from some corners.

City Manager Howard Brown Jr. initially proposed, as part of his budget for the fiscal year that begins July 1, capping deposits at $900,000 per year. He amended the proposal to delay the full appropriation of $1.2 million for a year, directing the $300,000 difference toward the general fund to help balance the budget.

The ordinance that established the economic development fund was passed unanimously in 2011 by city councilors at the insistence of former Mayor John Tyler Hammons. It dedicates up to $1.2 million of the city’s use tax collection for economic development projects.

Hammons said he “categorically opposed” any efforts to cut funding to the special accounts that were set up to support the “city’s job creation efforts.” He described any attempt to change the ordinance as breaking a promise by city councilors to Muskogee residents.

“The money in the economic development fund was set aside as a promise to the voters that the city was committed to growing our local economy,” Hammons said. “Cutting funding breaks that promise — there are ample revenues available to fund essential services such as providing needed pay raises for city employees without raiding the city’s job creation fund.”

Brown failed to return telephone calls seeking comment about his proposal. He discussed the request briefly Monday when he presented the proposed budget for fiscal year 2015 but never addressed how the diverted $300,000 would be used. It also was unknown Friday why he backed off his initial plan to cap in perpetuity annual deposits into the dedicated fund.

Ward IV Councilor Marlon Coleman joined Hammons in opposition to Brown’s proposal. Coleman described the creation of the economic development fund as “a giant leap forward” in the city’s strategic effort to make Muskogee more competitive in the race toward the development of its retail and industrial base.

“The city is in a position where we can optimize our potential based on the strides that have been previously made, or we can lose this moment and find ourselves gradually slipping backwards in time and never catching up to surrounding areas,” Coleman said. “If it is left untouched and allowed to function in the capacity whereby it was created, it can grow our economy over time and allow the city to make more permanent and long-term commitments” such as wage and salary hikes for city workers.

The ordinance that created the economic development fund established two accounts. Funds deposited into a general account may be spent for any purpose related to economic development. Revenue deposited into the economic opportunity account may be used as an incentive for the development of any high-impact business project or facility “that creates new, high-skill, high-wage jobs” that “foster sound growth.”

Hammons said redirecting dedicated funding intended to spur economic activities toward “non-growth activities will prove a short-term fix with long-term consequences.”

“The city must not lose its focus on creating more jobs,” Hammons said.

City councilors are scheduled to consider Brown’s proposal when they meet at 4 p.m. Tuesday during a special meeting. They also will review and consider passage of Brown’s proposed budget.

Reach D.E. Smoot at (918) 684-2901 or dsmoot@muskogeephoenix.com.

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