Council nixes Economic Development Department, creates a new budget line instead |

Council nixes Economic Development Department, creates a new budget line instead

After disagreement over the possibility of creating a new department, a complicated conversation about what constitutes a department ensued

The council chambers at Craig City Hall.
Cuyler Meade / Craig Press

Just after the Craig city council voted to end the small business grant program Tuesday, council members turned their attention to the proposed Economic Development Department that has been a part of much discussion since its introduction in October.

The department was initially introduced in order to create more transparency in the city budget — specifically around what the economic development committee does with its money. As it has been budgeted in the past, funds that the EDC receives come directly from the council budget, which some council members have argued makes council’s budget look more inflated than it actually is.

But, after Tuesday’s special council meeting dove into conversations about the definition of the words “may” and “department,” a sort of middle ground was created that most of the council and city staff felt accomplished the goals functionally, as well as semantically.

The would-be new department, had it passed by ordinance, would have been grant-funded for the first two years, and that money would have been used for payroll and other expenses. If the council wanted to defund that department when those grant dollars ran out, they would have had every right to do so, but in order to create a department, they would first have to pass an ordinance.

Members of the public who have been against the department voiced concerns that creating a department could open the door for potential expansion. Nevertheless, Ordinance No. 1128 was introduced at the Oct. 26 council meeting, and, at its first reading last week, narrowly advanced toward second reading in a 4-3 vote by the council.

At Tuesday’s special meeting, concerns around the department were again addressed. Council member Andrea Camp mentioned the budget line for the Museum of Northwest Colorado, which exists separately from the city council budget within the city’s overall budget without having its own department. This model was suggested as a potential precedent for having a budget for something that is non-departmental. In the 2022 budget, transfers to the museum, as well as the Yampa Building, each have their own lines that show how much they receive from the overall budget. Neither of those entities have governmental departments.

“The museum, for example — we took over that building,” Camp said on Tuesday. “We kind of took over that whole program from the county. We didn’t create a separate department for that, but yet it really has its own separate budget.”

There was an ordinance for the contract of the acquisition of the museum, city manager Peter Brixius said, but he was not sure if there had ever been a standalone ordinance to create the profit and loss in the budget. The museum has its own reserves, funding and personnel, which can be tracked from year to year.

The decisions around the museum’s acquisition were made before city attorney Heather Cannon began her services for the city, but Cannon said there probably should have been a separate ordinance to create a line in the budget for both the museum and the Yampa Building, according to the city charter.

“The museum was before my time, but if it’s operating as its own department, then should that have happened? You know, probably,” Cannon said. “But I don’t know why it didn’t. Perhaps it was a different reading like, ‘We don’t have to do it because there’s a may.’”

The “may” Cannon is referring to comes from the language of the city charter. In Article 3, Section 2, the charter outlines the process for departments created. It reads, “The Council may create and abolish such departments, by ordinance, as it deems necessary to the proper functioning of the City. The following services may be provided by the City: Police, Municipal Public Utilities, Finance, Public Works, Administration and Parks and Recreation.”

Cannon said her reading of that was less elastic, but that an alternative reading could create leeway.

“The way that I read that, it just gives you the ability to create or abolish a department,” she said. “It doesn’t allow you the ability to create or abolish departments without an ordinance or public hearing in that process.”

The word “may” in this case, Cannon said, is legally tricky and could result in two different readings of how the section is written.

“I don’t think you can just create a department without an ordinance. The ‘may’ just gives you the ability to do it,” she said. “If you look at it as the inverse — to abolish the department — you would never abolish the department without an ordinance and a public hearing and everything else. So the ‘may,’ is kind of a tricky word in that situation. I can see where there’s two different readings. My interpretation would be it just gives you the ability to do that. But I don’t think it gives you the right to create a department absent an ordinance.”

Council member Paul James, who has been vocal about his negative opinions about the potential new department — and city-operated economic development in general — said that the past council’s decision to not pass an ordinance may have been overlooked since there was essentially no controversy about the city taking over the museum.

“There was probably oversight there,” James said. “Basically everyone in this community, for the most part, wanted that museum. So there was definitely a lot less scrutiny there. That probably avoided a lot of the conversation that we’ve had over (the economic development department).”

This prompted a question from Brixius that has been the root of much of the controversy surrounding Ordinance No. 1128: What is the definition of a department, and is it just the creation of its own line in the budget?

To current council member and mayor-elect Ryan Hess, the act of calling something a department makes it a department. If the money is going to be spent the same way, he said, there is not a reason to have to pass an ordinance to create a department as long as it is not called a department.

“I think if it was called anything else, you wouldn’t need to (pass an ordinance), but if it’s called a department, I would think that you would align that with the charter and create a department,” Hess said. “I mean, if (economic development manager Shannon Scott’s position) was called the ‘economic development assistant,’ or anything like that, then I don’t think you’d have to form a department.”

Hess’s position was that the council would be doing something the public didn’t want by using that specific naming convention.

“That’s what the public doesn’t want to do: expand the number of departments,” he said. “So just don’t call it a department.”

Brixius said that it was possible to remove all references to a new department in city documents, and he recommended to the council on Tuesday to still keep the spending sheets to see how the economic development committee is spending its money.

“For the greater good, I would ask council to please consider what the staff’s direction is,” outgoing mayor Jarrod Ogden said. “If we change the word department so that you guys can agree upon it and move on with life, I really don’t see it as much different from the museum or the other places we have done this over the last couple of years. I guess this grabbed more traction because of the negative connotation that has been around it for whatever reason. Another thing, I want to ask this council to remember that we’re in different economic and uncertain times.”

Council member Chris Nichols introduced the motion to proceed on the city staff’s new recommendations for the expenses of the EDC to be noted on its own page or location for the most transparency for the public, but to not create a new department for economic development in the process. After being seconded by Camp, the motion passed 6-1, with the only dissenting vote coming from council member James.

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