Now it’s time for change. Nothing stays the same.
— Motley Crue
It was a great idea, the city of Albany’s so-called Deal-Closing Fund, built from a one-third collection of credits awarded the city’s Water, Gas & Light Commission by the Municipal Electric Authority of Georgia.
The funds, which will end in 2018 after bringing somewhere in the neighborhood of $90 million to Albany’s coffers, were collected as a hedge against electric deregulation, which seemed a sure bet a couple of decades ago. But deregulation didn’t happen, so the hedge funds collected are being returned to the 49 members of MEAG. As the second-largest user of MEAG’s services, Albany’s funds are quite extensive.
When $90 million is dropped into a city’s lap — $90 million paid by WG&L customers, by the way — its leaders must answer a burning question: What will we do with all this money? Water, Gas & Light officials said they could manage the windfall. City leaders said, “No way, Jose,” and declared they’d take care of that chore. WG&L ratepayers, meanwhile, said, “Hey, what about us? We’re the ones who paid the bills.”
Finally, a compromise of sorts was reached: The utility would incorporate one-third of the credits into its budget. The city would do the same with another third. And the final third would be put into a separate account, a kind of save-it-for-a-rainy-day fund. But when city leaders found the temptation to dip into that rainy-day fund too much, there was a call to come up with a creative way to use the money.
Spearheaded by City Commissioner Bob Langstaff, the city created the Deal-Closing Fund. Hammered out by the commission’s Long-Term Financial Planning Committee (comprising Langstaff, former commissioner Chris Pike and committee chairman Tommie Postell) and former Albany-Dougherty Economic Development Commission President Ted Clem, the fund would be used as enticement for businesses and industries looking to locate or expand in Albany and Dougherty County.
A formula was developed by which funds could be distributed to prospective businesses, the nuts and bolts of which included up to a million-dollar incentive package for companies that brought at least 100 “higher-than-minimum-wage jobs” or planned at least a $10 million investment in the community. The plan was lauded all the way up to the capital, state officials and economic developers calling it a “game-changer” that “puts Albany in any conversation about industry location.”
Which is all well and good, except so far there have been no takers. The EDC has had nibbles, and other area movers and shakers have had conversations. But the $17 million or so — which will reach somewhere between $22 million and $30 million by the time the MEAG funding ends — has gone untouched.
And that has a lot of local business owners, many of them considering expansions or investments themselves, asking what is looking more and more like a logical question: Why can’t the city change the guidelines and offer perhaps lesser monetary incentives for businesses looking to make slightly smaller investments?
The reasoning behind that question also seems logical: If I can’t afford to make a $10 million investment but have drawn up plans that bring my initial investment to somewhere in the neighborhood of $4 million to $8 million and I’m going to bring 30 to 80 well-paying jobs to the community, doesn’t that deserve some kind of consideration? Couldn’t we at least have a discussion?
I’ve personally talked to five business people who have said they would possibly either expand their operations or invest in new operations in this community if they could get some kind of financial incentives. They’ve made it clear they don’t want the city to front the money for their operation. They only want some kind of incentive that would allow them to maximize their personal investment.
These individuals, by the way, are among the most respected in the community. And while no business operates without risk, I’d feel comfortable knowing they’re at the helm of companies that not only could overwhelmingly improve the economy but could also bring much-needed jobs to the community.
The Long-Term Financial Planning Committee — which now includes Ward III Commissioner B.J. Fletcher in place of Pike — would be well-advised to at least consider altering the ground rules for its Deal-Closing Fund. Perhaps by doing so, the city would start getting a few deals to close.