Saturday, Mar 24, 2018
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Despite $800,000 from state, growth partnership tightens belt


Rent for office space in downtown Toledo is a large, but relatively unchanged, expense for the agency.


Toledo's Regional Growth Partnership got a "gift" of $800,000 from the state of Ohio late last year, but it was a grant with strings attached.

As a result of expanded responsibility for small-business incubation and high-tech startup companies, the growth partnership had to do a juggling act with its 2004 budget.

"It was almost a nightmare," said Susan Gilmore, treasurer of the region's lead economic-development agency and a member of the board's finance committee. Some budget line items ballooned - such as payroll - while others had to be cut in half or lopped off entirely.

In all, the budget grew from nearly $2.6 million in 2003 to $2.75 million for this year. A big chunk of the 2004 funding comes from the agency's first-ever Ohio grant.

It is an 18-month grant totaling $800,000, $534,000 of which has to be used this year, the rest in 2005, all to be matched by actual funds or "in-kind" contributions from area institutions and businesses.

That grant puts the partnership into the business of incubating small start-up firms in an 11-county northwest Ohio region, and it forces the agency to provide a variety of business services to small companies in the area. Essentially, it replaced about $1.4 million in funding that had been going to two other incubation organizations.

But at the same time, the growth agency took on another mission: It absorbed the three-year-old Regional Technology Alliance last year and is now presumed to be the area's major proponent of high-tech startups.

"We had to make some difficult budget adjustments," said Eileen Granata, acting chief operating officer for the partnership. "We cut out pretty much anything we could."

In order to use the state grant, the agency had to expand its offerings for small business, which required adding three positions, said Ms. Granata. That is why, she said, the largest single line item, salaries, rose from $849,600 last year to $1.1 million in 2004.

The partnership recently hired Greg Stewart as vice president of incubation and commercialization, at a salary of $78,000 a year.

Ms. Granata said raises of 2.5 percent for the 15-person staff were authorized but not given, until the future funding situation is cleared up.

Ms. Granata said she hopes to hire the other new staff

members soon.

The agency will soon start a search for a new president and chief executive officer, to replace Don Jakeway, who left last fall to become head of the Michigan Economic Development Commission.

His successor won't be named until well after the release of the long-awaited Hammer, Siler, George Associates study of the Toledo area's economic-development activities.

Another large budget line item, rent, stays about the same, at $110,000, for the agency's 5,500 square feet of space in Edison Plaza.

Ms. Granata said the agency sub-lets from the Toledo Area Chamber of Commerce, a major financial backer, at about $15.75 per square foot, or $87,000, below market rates for the building (the rest of the $110,000 is counted as an "in-kind contribution from the chamber).

Office costs remain steady at $55,300 for the year.

The cost of professional services is up to $109,000, from $87,300.

Travel expenses are up slightly, to $76,900, from $75,000. The agency plans to spend about $25,000 this year for promotional materials, up from $10,000 last year. "We needed better promotional materials," said Ms. Granata.

But most expense categories were slashed, including sponsorships and meeting costs, down from $83,000 to $55,000; trade shows, down from $63,400 to $32,000, and professional dues, down from $87,000 to $36,000.

Some categories were eliminated, such as tuition reimbursement, which cost $6,500 last year. Ms. Granata said she doesn't believe any staff members wanted such reimbursement in 2004.

The new budget also includes $17,400 for car leases, down from $20,000 last year, and $13,000 for parking charges, level with last year.

Two leased cars are used by partnership executives and one is a pool car, but all are being phased out, Ms. Gilmore said."

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