Little Rock will restart its payments to the Little Rock Regional Chamber of Commerce this month.
The annual funding that the chamber had received from the city since 1993 stopped in 2015 after a judge ruled that the payments were unconstitutional.
A constitutional amendment approved by voters last year now makes it legal for localities to enter into economic-development contracts with area chambers, or another private entity.
The Little Rock Board of Directors approved a $300,000, one-year contract with the chamber in a 7-1 vote Tuesday night. Vice Mayor Kathy Webb provided the "no" vote.
She said she is concerned about transparency, or lack thereof, in how public funds would be spent by the private chamber, as well as some political stances the chamber has taken, such as supporting the 30 Crossing project to widen Interstate 30 in downtown Little Rock.
Webb's fellow board members didn't share the same concerns, with the other seven city directors in attendance supporting the contract. Ken Richardson and B.J. Wyrick were absent.
Mayor Mark Stodola, who runs city board meetings but votes only in the event of a tie, indicated his support for payments to the chamber.
"I will tell you that if we are going to compete in this country, we've got to do these kinds of things. This is not unique. Virtually every mayor I talk to understands the relationship between a local City Council and its chamber of commerce and they fund the chamber far in excess of what we are talking about right here -- Tulsa, Oklahoma City, Memphis," Stodola said.
In response to critics saying that the public gets no accountability on how the chamber money is spent, chamber President Jay Chesshir said that's not true.
There's a yearly audit of the chamber's economic-development fund -- which is $1.1 million this year, he said.
That audit is available to the public. It details not only how the city's public funding is spent in that account, but also details private dollars donated by companies in the organization. The account is separate from the chamber's nearly $2 million operating budget.
Chesshir said the chamber also provides quarterly reports to the city.
"That quarterly report will tell you every single contact, every single prospective business or expansion of business looking to come here. It's all there for people to read if they will take the effort to read it," Stodola said Tuesday.
Since the chamber is a private organization, it is not subject to the state's Freedom of Information Act that requires government agencies to make records public, except for instances in which it does receive public funds.
The amendment to the state constitution that now allows for economic-development payments to a private entity requires the chamber to release a yearly report detailing how it satisfies its contract with the city. That report doesn't have to include specifics that could be seen as putting the city at a competitive disadvantage in attracting a particular company.
After it began making economic-development payments to the chamber in 1993, Little Rock dispensed more than $3.9 million through 2014.
In 2015, a Pulaski County judge said the city's contracts with the chamber were "contracts only in name," and that neither the city nor chamber could show what the city got for the money.
Cities across Arkansas stopped their payments to chambers of commerce after the Pulaski County ruling, but many have since restarted payments with the constitutional amendment in effect.
The El Dorado City Council voted to enter into a $45,000 contract with its county chamber in January, for example.
Little Rock and North Little Rock were the subjects of the 2015 lawsuit filed by a resident.
A North Little Rock spokesman said that city plans to contract for economic-development services this year, but that it first must put out a request for proposals.
Little Rock also put out a request for proposals for the service. The Little Rock chamber was the only entity to apply.
Chesshir said the chamber's marketing capacity has suffered in the two-plus years Little Rock hasn't been able to make a financial contribution.
"Economic-development services for cities and counties and regional entities across the country have been conducted this way for decades," Chesshir said. "Agreeing to a new contract for service will now allow us to further staff economic-development efforts while regaining a robust marketing program to market this community across the country and world."
City Manager Bruce Moore said the city benefits from job growth spurred by companies the chamber persuades to move to or stay in Little Rock.
He distributed a sheet to board members last week that said the chamber had lured companies that created 7,446 jobs from 2005 to 2017.
Investment by those companies totaled almost $1.2 billion, the document said. It didn't take into account those companies that no longer were operating in Little Rock, or how many of those employees have since been laid off or terminated.
The chamber's proposal submitted to the city details how the $300,000 will be spent.
It proposed $105,000 in expenses for internal marketing, including payments to its existing industry programs, public relations services, entrepreneurial development and events. It proposed another $195,000 in external marketing, including events, the cost to host business prospects, a contribution to the aviation air show, consultant branding costs, website marketing costs, "talent programming" and a subcontract with the Metro Little Rock Alliance.
Moore said he couldn't hire an in-house economic-development staff for that amount of money that could do as much as the chamber.
"I truly think this model is one that is best for the city. We want somebody who, every day, they wake up and all they are thinking about is to either retain jobs in the city or add jobs. If I were to develop a staff team that focuses on that, I will tell you we'd be spending more than $300,000 a year to be effective," Moore said.
Metro on 04/19/2017