State senator considers legislation to give public access to EDC records

How economic development groups receive funding can affect whether they fall under Indiana’s public access laws.

The Grant County Economic Growth Council maintains the law is on their side in its position that it is not a public agency.

The nonprofit group directly receives hundreds of thousands of dollars in economic development income tax each year and other public money, in addition to money from private sources.

Under state law, one key factor is whether a group is subject to audit by the State Board of Accounts. If a group is audited, it falls under public access laws, meaning its meetings and records are open to the public.

Since 2007, the State Board of Accounts has waived an audit for the Growth Council because it has reported that less than 50 percent of its expenditures come from tax money.

Executive Director Tim Eckerle has said that public and private money provided the group is not tracked separately by the Growth Council.

He said the Growth Council is simply following its attorney’s advice and the state’s opinion on this matter.

The Growth Council’s attorney, Jerome Holderead, could not be reached for comment.

The Growth Council does conduct private audits each year and hires accountants to keep track of how public and private money is spent. However, requests from the Chronicle-Tribune for these records have been denied.

Steve Key, general counsel for the Hoosier State Press Association, provided the Chronicle-Tribune legal advice in its public access request. He said there were similar court cases involving public money and public access questions.

The Chronicle-Tribune is also a member of the HSPA as well as the Growth Council.

Key said a 1991 court case found if a group receives public funds like a subsidy — regardless of what services it provides — that it would fall under the state’s public access laws.

However, he said other court cases found that “fee for service” arrangements — where funds are disbursed for specific services — do not.

The Growth Council does have current agreements with Marion and Gas City for $50,000 and $20,000 per year, respectively.

Eckerle has said a similar agreement was last approved by the county about five years ago, which was before it started receiving a portion of the county economic development income tax rate. He has said this agreement had a provision that would make it “evergreen” and still applies today.

The Chronicle-Tribune has been unable to obtain a copy of the agreement. Meeting minutes from an April 10, 2007 Grant County Board of Commissioners meeting mention a memorandum of understanding between the Growth Council and the county that was renewed annually. The county auditor’s, commissioner’s and recorder’s offices could not find a copy. County attorney Kyle Persinger said he did not have a copy of an agreement in his records.

Eckerle said he would continue to search for a copy. He said a decision to set up or renew a fee for service agreement would be up to the Growth Council’s executive committee.

In June, the Growth Council attempted to submit a fee for services agreement with the Grant County Board of Commissioners, but quickly withdrew it. This was shortly after the Chronicle-Tribune began questioning whether the Growth Council would fall under the state’s public access laws.

A neighboring economic development group is currently in the process of renewing similar contracts.

The Economic Development Group of Wabash County has asked the Wabash County Commissioners and North Manchester Town Council to approve new contracts.

These include set payment amounts next year — $70,000 from Wabash and $17,000 from North Manchester.

EDG President and CEO Bill Konyha said his organization does not control any CEDIT funds and its fees for services arrangements amount to less than 45 percent of its annual funding.

“We are a contractor like any other contractor,” he said.

Konyha said the EDG provides regular reports to elected officials, though like the Growth Council its meetings are not open to the public. He said the contracts include provisions that keep local elected officials and the public informed and the EDG maintains positive contacts with local media.

“I think our partnership (with local government) is extremely effective,” he said. “I think when we examine the relatively minor fees for services the benefits speak for themselves.

“Frankly, I don’t know how we could be any more open.”

Last session, Democrats introduced Senate Bill 163, which sought to increase transparency of incentives offered by the Indiana Economic Development Corp. Banks said there were aspects of the bill that could equally apply to local economic development groups.

“I’m not saying it was good or bad, but I think it’s on the right track,” he said.

Banks said it was an “important subject” that he was interested in seeing more work on during the legislature’s next session.

The Growth Council is governed by a board consisting of local elected officials, business leaders and other community representatives.

As previously reported, several local elected officials said they were satisfied with how the Growth Council keeps them apprised of its activities.

For example, Grant County Council President Jim McWhirt, R-At-large, said he has never had a problem with obtaining information from the Growth Council or any reason to feel money was spent inappropriately.

Key said allowing the public and media to attend meetings or review records was less about finding wrongdoing and more about accountability. He said the public simply had an interest in how their money was being spent.

“It doesn’t have to be a situation where the public is looking at it as whether there was crime or fraud,” he said. “It’s a matter of accountability — is the money being spent in a proper way or in an efficient way or successful way?”

McWhirt said he did not recall a specific discussion about public access issues when the county tax council agreed to give the Growth Council a portion of the CEDIT rate, but noted the issue has not been mentioned until recently.

Recently, the county council rejected funding requests from LifeStream Services for its New InterUrban bus service and the Marion-Grant County Senior Center because several members have expressed the opinion that the county should not fund nongovernmental agencies.

McWhirt said the Growth Council was a different case.

“There is a specific function that we are asking them to provide us,” he said. “Economic development is an important venture that we want to promote in Grant County. The entire county benefits from the Growth Council.”