BDC looking for new funding agreement with the county

(Photo via the Cortland County BDC/IDA Facebook page).

A new four-year funding agreement between Cortland County and the Business Development Corporation (BDC) is moving along.

Legislators approved the recommendation of a new contract at Tuesday’s Finance and Administration Committee meeting. The new agreement would start Jan. 1 of next year and would fund the BDC in 2023 to the tune of $492,193, an 8 percent increase from its 2022 budget. In the subsequent years of the agreement  — 2024 through 2026 — the BDC would receive a 5 percent increase from the funding seen the year prior. For example, in 2024, the county would pay the BDC a total of $516,803, an increase of 5 percent from 2023. Below is how the contract would scale up if approved:

  • Funding in 2023: $492,193 (8 percent increase from 2022 funding).
  • Funding in 2024: $516,803 (5 percent increase from 2023 funding).
  • Funding in 2025: $542,643 (5 percent increase from 2024 funding).
  • Funding in 2026: $569,775 (5 percent increase from 2025 funding).

The deal would signify a 26 percent increase in funding for the agency overall in the next four years, according to Legislative Minority Leader Beau Harbin (D-LD-2). Harbin was the sole dissenter during the committee's vote to approve the new contract.

Garry VanGorder, the Cortland County BDC executive director, gave a presentation to legislators on Tuesday. He made the case for a new contract. 

“We help drive dollars into county government through sales tax generation and occupancy tax generation,” VanGorder said. “BDC brings jobs and millions of dollars in grants and community development initiatives. We follow up from beginning to end. We try to be a consistent resource for small businesses.”

BDC, VanGorder said, works with small businesses with workforce development and hiring, as well as marketing, start-up and expansion logistics, business plan development, financing options, and grant applications. VanGorder said the agency works in a county where the business environment is mostly conducive to small businesses.

The same BDC staff also runs the county’s Industrial Development Agency (IDA), which receives its funding from Payments in Lieu of Taxes (PILOT) project agreements. The IDA then uses those funds for community projects, VanGorder said, using the cleanup of the Apex Tool Group manufacturing site in the city of Cortland as an example of projects funded by the IDA. 

“These fees come from companies who want to invest in our community. In return for providing them incentives (to invest in our community) they pay the IDA a 1 percent project fee,” VanGorder said. “Those dollars are used exclusively for reinvestment in our community. There is no impact on the county taxpayers when we talk about project fees.

There are 18 active PILOT projects in Cortland County, VanGorder said, noting they represent more than $178 million in investment. Said projects, he added, employ more than 800 people and contributed 100 temporary construction jobs in 2021 alone.

“We put together a proposal based on what we felt (would fund) four more years of the activities I just described,” VanGorder said of the new contract. “I want to maintain a quality staff that produces quality work.” 

Legislative Majority Leader George Wagner (R-LD-15) expressed support for the new contract.

“The 8 percent (initial jump) is no surprise given the inflationary trend we are seeing right now,” he said. “I personally fully endorse this.”

On the other side of the aisle, the annual escalators on the contract, as well as the initial 8 percent hit, were an area of concern for Harbin.

“I want to know what that (26 percent) increase (in funding) is really going to deliver for the citizens of this county. We have never been able to fund any of our departments with a 26 percent increase,” he said. “We have debated ad nauseum to give small increases for staff salaries. I think the work you do is tremendous, but where is that (money) going to be applied to so that we see a return on our investment.”

VanGorder said the current BDC contract is lenient and added that the 8 percent increase in 2023 is “driven by the current state of the world.” 

“Against our better wishes, we have had to use IDA resources to fund BDC operations,” he said. “We expect to expand our program further. (With this proposed contract) I took my best stab at what I thought it would take for us to continue to meet our obligations but also expand.”

The current contract is found below:

  • Funding in 2019: $435,827 (No increase from 2018 funding).
  • Funding in 2020: $442,364 (1.5 percent increase from 2019 funding).
  • Funding in 2021: $449,000 (1.5 percent increase from 2020 funding).
  • Funding in 2022: $455,735 (1.5 percent increase from 2021 funding).

County administrator Rob Corpora agreed with Wagner, noting 8 percent increase in expenses a year “is normal right now.”

“(This increase) is just like most things we are going to have to contend with in next year’s budget. We are going through it with labor, utilities, vehicles, and fuel,” he said. “Anything we do, any improvements we make, we are paying considerably more. This is being passed along to everybody. Unfortunately, there is nothing we can do but pay for it.”

Legislature Chair Kevin Fitch (R-LD-8) called the BDC “the county’s investment.”

“We don’t have the capacity to do what they do,” he said. “The proof is in the pudding. They showed us they brought employment and sales tax. They did what they tasked them to do. We have to continue with this. Cortland County would fail if we didn’t have the BDC do what they do for us.”

A failed motion by Harbin to change the 5 percent-a-year escalator down to 3 percent after the initial 8 percent increase did not receive a second motion.

The County Legislature will vote on the new contract with BDC at its meeting on June 23.