09/21/2023 | Press release | Distributed by Public on 09/21/2023 09:44
The Washington County commissioners are expected to approve what could ultimately amount to an 11-year contract that pays a total of $1.6 million to the county's Chamber of Commerce to promote economic development, although not everyone is on board with the arrangement.
At the top of this afternoon's agenda meeting is the contract that could lock the county into a more than decade-long agreement that will substantially boost the annual stipend given to the chamber while also expanding its responsibilities for business growth.
"It's much more economical for the partnership to continue with the chamber and enhance their responsibilities to meet our needs and economic opportunities," Commission Chairwoman Diana Irey Vaughan said Wednesday.
The new contract would pay $140,000 to the chamber this year and next year, with annual 3% percent increases through the life of the agreement, which would expire Dec. 31, 2033. There is an opt-out clause at the end of 2028 with the ability to renew for another five years, but the cost to terminate the agreement at that time might make it prohibitive for the county to end the contract early.
If the full length of the contract is reached, the county will pay the chamber $182,668 in 2033. The county has been paying $70,000 per year to the chamber since the partnership began in 1999.
Irey Vaughan said the contract has various stipulations for the chamber that include maintaining a listing of all available property sites in the county, meeting with potential new businesses about various initiatives, employing staff for specific economic development efforts and having comprehensive plans and updates. Other parts formalize existing expectations, such as having the chamber's president chair the Local Share Account committee.
"There are specific functions and duties that they're required to perform that have never been in a previous contract," she said.
Commissioner Larry Maggi also applauded the agreement, along with the long partnership with the chamber that he feels has been money well spent by the county over the past quarter-century.
"We've got our money's worth from it," Maggi said. "They've just proven their worth and they've got some benchmarks they've got to meet going forward."
But not everyone on the board is happy with the agreement. Commissioner Nick Sherman said he plans to vote against the motion at today's meeting because he believes it "handcuffs" the county with a long-term contract that doesn't offer much wiggle-room for future boards.
"This contract is disrespectful to future county commissioners because it takes away their ability to not only negotiate for the taxpayer, but it also takes away board appointments that should be the obligation and responsibility for the seated county commissioners," Sherman said.
Specifically, it requires that chamber's president to have one of the seats on the Southwestern Pennsylvania Commission representing Washington County. He added there are few benchmarks to analyze the chamber's performance and no real recourse if those standards aren't met since the opt-out cost could make it too expensive to terminate the contract early.
"I would disagree with any no-bid contract for any particular reason at all," he said. "I believe any time you're spending this much taxpayer money, we owe them the ability to make sure we're spending their money properly and getting the most bang for their buck."
Irey Vaughan said the partnership between Washington County and the chamber has grown over the years and is much more cost effective than if the economic development efforts were done within a county government agency. She said an in-house department could cost hundreds of thousands dollars a year, and the proposed agreement is still less than neighboring counties spend, including Butler and Beaver counties, which pay $300,000 and $145,000 respectively to their economic development groups.
In addition, chamber President Jeff Kotula said the organization is matching the county's contribution for at least the first five years of the contract, meaning the financial impact for economic development efforts will be doubled.
"As this is a partnership, not a vendor relationship, the chamber matches county dollars with our own as well as provides additional resources by leveraging our marketing initiatives," Kotula said. "This cooperation has provided a significant return on investment in terms of jobs for our residents and expansion of our economy."
He added that if the county terminates the agreement after five years, it will only be required to pay half of the remaining portions of contract, which would be similar to the previous arrangement over the past 24 years.
"This agreement represents a long-term commitment for the public and private sectors to work together on a shared vision for economic and job growth," Kotula said. "And as the chamber is increasing its work with the county, we are also dedicating additional dollars as well as resources, staff and expanding systems."
The commissioners are scheduled to meet at 2 p.m. today in the board room on the ground floor of the Crossroads Center building at 95 W. Beau St. in Washington.
Contract Agreement Annual payments to the Washington County Chamber of Commerce in proposed 11-year contract 2023 - $140,000 2024 - $140,000 2025 - $144,200 2026 - $148,526 2027 - $152,982 2028 - $157,571 2029 - $162,298 2030 - $167,167 2031 - $172,182 2032 - $177,348 2033 - $182,668.
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