City of Cedar Rapids reduces Metro Economic Alliance membership

CEDAR RAPIDS — The city of Cedar Rapids is scaling back its membership with the Cedar Rapids Metro Economic Alliance after the mayor initiated a conversation around how to better target funding given to the organization and about the entities’ relationship as economic development partners.

The Cedar Rapids City Council on Tuesday unanimously voted to reduce its membership with the alliance from $75,000 to $25,000 for fiscal 2024 — the budget year that began July 1 and ends June 30, 2024.

The decision comes after Mayor Tiffany O’Donnell last month pulled the membership payment from the council’s consent agenda to further consider the city’s membership. Items on the consent agenda — considered non-controversial — are grouped and voted on as a whole.

O’Donnell said Tuesday the $25,000 membership was an appropriate baseline investment the nine-member council supported, knowing the city has the opportunity to target funds toward future initiatives with the alliance.

“The council wants to be good stewards of taxpayer dollars and going forward use our resources to support specific initiatives with specific measurements and outcomes,” O’Donnell said. “ … It’s important that people understand that we value the work that the Economic Alliance does for the metro and the region.”

She said after conversations with city staff and some council members, the city team arrived at the $25,000 membership. O’Donnell said retaining a high membership level “reinforces the value that we place upon the Economic Alliance as a metro and regional entity.”

Soon after Jeff Pomeranz arrived in 2010 to become Cedar Rapids’ city manager, the city launched an economic development office. Over time, the office has taken on more duties in recruiting and retaining businesses, helping businesses expand and growing the workforce. The Economic Alliance has a broader focus on the metro area, while the city’s staff focuses on Cedar Rapids exclusively.

O’Donnell has advocated for expanding economic development and workforce programming, particularly with more of a focus on business attraction. The city’s fiscal 2024 budget includes $390,000 for economic development programs.

O’Donnell said the economic development landscape has changed significantly since private organizations merged in 2011 to become the Economic Alliance. Now, she said interested companies and developers seek data and other information from the city, which awards tax incentives they may need to support their projects but also takes a proactive approach in economic development.

She said the alliance plays an important regional role, but the city also “requires a laserlike focus on its own growth” to be the economic driver of the metro area.

Overall, according to information provided by the city, it paid $802,045.31 to the alliance from fiscal 2019 through fiscal 2023, the budget year that ended June 30. That includes membership dues and payments for items such as watering and planting beds, farmers market sponsorships, hotel-motel tax allocations, Leadership for Five Seasons tuition payments for city staff and other economic development programs.

The city several years ago started a new application process for awarding economic development funds to groups that align with city goals identified in its strategic plan. The economic development implementation grants, launched in spring 2021, are awarded on a two-year cycle, Economic Development Manager Caleb Mason has said.

The Gazette previously reported that the city’s memorandum-of-agreement with the alliance for economic development services shrunk from $120,000 in fiscal 2018 to $105,000 in fiscal 2019 to $95,000 in fiscal 2020.

After starting the competitive process, in the 2022 and 2023 budget years, the alliance received $37,500 each year.

Since launching this conversation two weeks ago, O’Donnell said she has spoken with the alliance’s board chair, Hugh Ekberg, and she anticipates conversations with alliance officials in the coming weeks about new ways to partner and build on existing collaborations.

“This annual renewal provided us an opportunity as a city to take a hard look at what we’re doing internally and how we can best use our resources to support the metro and the region,” O’Donnell said.

Comments: (319) 398-8494; marissa.payne@thegazette.com