New bylaws approved to restructure economic development board

Published 8:16 am Wednesday, September 20, 2017

EDP redefined

“EDP 2.0” is here. The Danville-Boyle County Economic Development Partnership voted Tuesday morning to adopt new bylaws that have disbanded the previous EDP board and set in place a new board structure.

The bylaws passed with opposition from Lisa Knetsche, the representative of the Chamber of Commerce on what is now the old EDP board. Knetsche declined to comment on her “no” vote following the meeting and directed a reporter to Paula Fowler, executive director of the chamber.

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Fowler said the no vote was due to three problems the chamber has with the new structure:

• the new EDP board “has too many public seats, with no provision to restrict the number of public officials who fill those seats;”

• public officials can now hold EDP officer positions, “which could be a direct conflict of interest;” and

• “we thinking they’ve removed the voices of the smaller entities” by not giving voting seats to the chamber and three other organizations.

“In spite of our vote … the majority vote of the partners is to restructure and we are a team player — and we always have been,” Fowler said. “The mission of the chamber has not changed.”

The new bylaws create a board of up to 17 appointed members:

• three each appointed by the Boyle County Fiscal Court, City of Danville and Boyle County Industrial Foundation;

• one each appointed by the cities of Junction City and Perryville;

• three appointed by the EDP’s private “Chairman’s Circle” donors, currently Ephraim McDowell Health, Centre College and Farmers National Bank; and

• three at-large members appointed by the rest of the board.

The EDP members have until Oct. 11 to provide the names of those they are appointing to the new board. The new board is scheduled to meet for the first time on Oct. 18.

At that point, the members will hopefully work to choose the three at-large members and elect new officers, current EDP Chair Ben Nelson said. Nelson and the other EDP officers will remain in their seats as officers until the new officers are chosen.

The biggest changes from the original EDP board are increased representation for local governments and elimination of voting seats for the four entities now considered “advisory partners” — the chamber, the Convention and Visitors Bureau, Heart of Danville and Main Street Perryville.

The representatives for Heart of Danville and Main Street Perryville both voted in favor of the new bylaws. The CVB would have voted yes, but its representative, CVB Chair Brittany Adams, was unable to attend the meeting, CVB Executive Director Jennifer Kirchner said.

Perryville votes yes

A roll-call vote was held on approval of the bylaws. The voting was held up for a moment when it was Perryville Mayor Anne Sleet’s turn to vote.

“Mayor Sleet, where are you on this?” Nelson asked.

“Jody came to our council meeting and he explained it to them — the council people there. And they asked questions and Jody gave answers, so we’re thinking about it, but we’ve already done our budget,” Sleet said, referencing a rule in the new bylaws requiring all partners to contribute financially to the EDP in order to receive their voting seats. The requirement is based on population and means Perryville would need to invest around $500.

“I think what we’ve suggested is … we would give you a grace period because of the budget planning cycle,” Nelson said. “So … are you in favor of the bylaws or not?”

“Nobody complained about it, and so I think it would be OK,” Sleet said. “So, I’ll take this back to them.”

“Well, we’re looking for a vote right now. Are you in or out? Yes or no?” Nelson asked.

“This is to support these bylaws,” EDP President Jody Lassiter said. “The city can still make its determination afterwards (on investing).”

“Oh, OK, well yes, I’ll vote,” Sleet said.

“So you’re OK with the bylaws?” Nelson asked.

“Yeah,” Sleet said.

“OK, thank you,” Nelson said.

Junction City does not regularly send a representative to EDP meetings, so no one was present from that city to vote one way or the other.

Amendments from Danville

The bylaws included changes recommended by the Danville City Commission on several technical points.

They now place a requirement for all partners to support the EDP financially, including the Boyle County Industrial Foundation. Previously, the requirement that the Industrial Foundation contribute had not been spelled out. Now, the foundation will be required to contribute a minimum of 67 cents per person that lives in its “service area.”

“Our intent was to wholesale adopt everything we got from (City Attorney) Stephen (Dexter),” Nelson said.

Reasoning on chamber’s no vote

Chamber Director Fowler said under the new board, there are as many as eight seats held by people appointed by public agencies, and as many as nine seats held by people appointed by private partners.

“It’s really pulling it almost to a 50-50 split,” she said. “… When you’re dealing with economic development, there’s a real need for confidentiality. … Hopefully, there’s safeguards in place, where there’s not a discussion of who’s being discussed, but elected officials have a transparency requirement, so I guess that’s where some of the concern comes from.”

As an entity that receives more than 25 percent of its funding from taxpayers, the EDP is subject to the Open Records Act. However, it may not technically be subject to open meetings law as long as public officials do not make up a majority of its board. But the EDP has also voluntarily subjected itself to the Open Records and Open Meetings acts, and officials have stated emphatically that the new EDP board will do the same.

Nelson said he received an email from Knetsche on Sept. 12 letting him know she was going to vote no on the changes. Up until that point, he had received no communication from the Chamber that it was opposed, he said.

In Knetsche’s Sept. 12 email, which Nelson provided to The Advocate-Messenger, she wrote that she is “not comfortable with the thin margin between public and private members.”

“In addition, I know you feel that the current structure ‘ain’t working,’ but after sitting on this board for two years, I disagree,” Knetsche wrote. “While I think the chamber, CVB and Main Street programs can thrive by loosening the strings a little, I think the board loses the perspective of small businesses by removing their chairs from a voting position.”

As for the ratio of public-to-private seats, Nelson said it was always a goal every step of the way to maintain a private majority on the board in order to prevent the EDP’s actions from becoming “politicized.”

“I was satisfied that the composition of the board as it was passed today achieved that goal,” Nelson said after the meeting. “The thin margin — I don’t feel that it’s so thin that it’s a problem.”

Fowler said another objection from the chamber is the removal of its vote and the votes of the other agencies that are now in advisory roles.

“There’s a lot of business and non-profits that are small,” she said. “With the chamber on the board in the past, we’ve always had a vote that represented that voice, as did the Heart (of Danville) and Main Street Perryville … a lot of those players (on the new board) now are not the smaller entities.”

Nelson said the EDP partners can appoint whoever they think will best serve to their seats on the board. The goal is then for the new board to choose people for the three at-large seats that fill gaps in the makeup of the board, so that it “maintains a demographic perspective that represents our community.”

And, Nelson added, he doesn’t think not having a vote will mean the four advisory partners won’t have a voice. He said he hopes all the advisory partners continue to attend EDP meetings and work with the EDP on projects.

“I don’t want to do anything that adversely impacts any partner — and I don’t think we have,” he said.

The chamber is also opposed to allowing elected officials to serve as EDP officers, Fowler said.

Under the old bylaws, representatives for public partners were barred from serving as chairman, vice chairman or any officer role.

Fowler said a conflict of interest could arise if an elected official is both a representative for one of the largest donors to the EDP and chair of the EDP board. She said she couldn’t provide a theoretical example off the top of her head, but pointed to a previous EDP meeting, when Knetsche asked Boyle County Judge-Executive Harold McKinney where his priorities would be and McKinney told her they would always be with the taxpayers.

That shows elected officials are “not wearing the EDP hat first,” Fowler said.

Nelson said that concern was not mentioned to him prior to the meeting, but he disagrees with it. The prior ban on elected officials in officer positions was “an artificial (requirement) that held no value,” he said.

“This notion that the partnership is made up of equal partners working together — I think that piece of the bylaws that says now public people can be elected as officers, too — I thought that was moving in the spirit and the direction of equity and equal treatment,” Nelson said.