The City of Rio Rancho may pull its funding from the Sandoval Economic Alliance.
SEA has been receiving $200,000 a year from the city. This contract expires June 30.
This economic-development company gets about a third of its funding from the city, a third from Sandoval County and the rest from private donations.
Sandoval County spokesman Stephen Montoya declined to comment on what the county would do if Rio Rancho pulled its funding.
“We need to establish future direction as part of our budget process, as well as the long-term and the long game of economic development,” said city Economic Development and Business Relations Manager Matt Geisel at a Rio Rancho Governing Body special meeting March 17.
SEA was created six years ago. Geisel said the city paid $1.2 million to SEA over that time “with questionable results and forward progress.”
“The city’s voice is dwarfed with the funding level and the regional economy, and whether it’s the Sandoval County economy or northwest quadrant in the metro area, our voice has been dwarfed,” he said.
Geisel said another factor in SEA’s lack of traction is that it’s named after a county, which is a branding “no-no.”
Still, SEA has the ability to bring industry leaders together, leverage private-sector dollars and attract subject-matter experts, Geisel said. It also has “committed and truly passionate board members, and there is value and collaboration and partnership,” he continued.
He said if the city continued funding SEA, it could use the knowledge gained from the past six years to leverage “lessons learned.”
Another setback to SEA is that there are too many meetings and not enough action, Geisel said.
“I could spend 15 hours a week in meetings with the Sandoval Economic Alliance,” he said.
Geisel said SEA lacks efficiency because it is a part of too many committees and has three CEOs in the past five years.
“Economic-development managers are in their roles for five, 10, 20 years,” Geisel said. “It’s an area you want to see longevity of staff, and economic development is a long game, and if you’re changing leadership, you’re in many ways restarting.”
SEA assists in economic development across the county, including communities with less staff and resources. As a result, the city’s return on investment is being diluted, Geisel said.
SEA CEO Fred Shepherd attended that meeting and recognized the city’s frustrations.
“We appreciate the position the city is in at this time and the budget stress they are facing,” he said. “We are continuing to have conversations with them on potential strategies to move forward in order to provide economic development services to them. We are committed to continuing to serve the county and fulfill the tasks and commitments we have to them and our private-sector partners, and hope to find a resolution with the city in order to continue serving them as well.”
Shepherd provided data that includes what SEA has contributed to Rio Rancho’s economy.
SEA has worked on 23 projects with 17 companies in the city. These projects include anything from company relocations to expansions, and generated $9.77 million in expenditures on brick-and-mortar facilities.
SEA has helped create 1,542 economic-base jobs, meaning jobs that bring in money from outside the area, and 64 non-economic-base jobs.
Geisel presented three options for governing body members to consider.
He suggested the city use the $200,000 it would have given to SEA to fund in-house economic-development efforts. The city has the highest vested interest in developing its economy, Geisel said.
“If we’re successful, it impacts our bottom line, and if we struggle, it also impacts our bottom line,” he said.
Ultimately, he said, every company that wants to come to Rio Rancho has to go through the city. Having this strong alignment can create an integrated economic growth, Geisel said.
“One of the common things we hear about why we need an external organization is because of privacy,” he said.
The city must share information under the Inspection of Public Records Act.
“If there are true trade secrets, the city is able to protect those under IPRA,” Geisel said.
When he worked as the state Economic Development Department cabinet secretary, the department had extra protections for such information.
A hybrid approach would fund in-house economic development efforts and use external organizations.
Geisel said this approach is more traditional.
The Village of Las Lunas has two people in economic development, and the City of Las Cruces has five, he said. Both communities funded outside organizations to assist in economic development.
One business organization
The last idea Geisel presented to the council was a concept.
He suggests the city looks to one business organization, whether an umbrella organization with subsidiaries or simply one organization, to handle chamber-of-commerce-type work, economic development and any other efforts the city deems important.
Some pros to this would be that it would be a private entity to which IPRA law would not apply, he said. It would also create market efficiencies and a more unified goal with the city, he said.
“The other side of a pro opportunity is that maybe this is the jumper cable, if you will; let it serve as a motivator for Sandoval Economic Alliance to come to grips with what has been our brewing frustrations,” Geisel said.
At the end of the presentation, City Councilor Bob Tyler said SEA is more concerned with the county’s economic development and Rio Rancho needs more focus.
“I look at the amount of money we are spending for what we are getting in return, and I just don’t see what we are getting in return,” Tyler said.
The governing body will hear public comment regarding the 2020-21 budget and adopt a budget during its regular meeting at 6 p.m. May 27 at Rio Rancho City Hall. Residents can attend in person but are encouraged to submit comments via email to [email protected] or fax to 994-2557 by 4:30 p.m. the day of the meeting.