By Krista Kielsmeier

Haines Borough code mandates the municipality have a department of economic development and a director to lead it.

“Despite this code requirement, to my knowledge the department has never been established,” Mayor Stephanie Scott wrote in a memo last month, requesting that section of code be repealed.

The Haines Borough Assembly this week advanced to a second public hearing an ordinance removing the code language that mandates a department of economic development, headed by an economic development director.

It’s the latest wrinkle in a decades-long discussion of how the municipality should boost the economy, efforts that have included hiring economic development directors from time to time, and voter approval of a mechanism to fund economic development efforts in 2001.

Scott and borough manager Mark Earnest envision a new, executive assistant to the manager position will handle many of the economic development director’s responsibilities.

“That’s how the assistant position evolved, and I think that there’s a very large component of what would normally fall under economic development director that’s incorporated into the job description of assistant to the manager,” Earnest said.

Scott said the code change would have no impact on the borough’s municipal sales tax designated for tourism promotion and economic development.

“I’m comfortable with our level of staffing, and when we do hire a new manager and we do bring on that executive assistant position, I think we’ll be well covered with respect to taking care of things and making this an economically viable town,” Scott said.

Robert Venables served as Haines economic development director for the City of Haines prior to consolidation. The position was eliminated after Venables became borough manager, when economic development duties were added to the manager’s job.

Venables this week said he was “disappointed” the director position had not been filled since his departure as manager in 2008. “Hopefully, they’re coming up with a better fix than establishing a department and leaving it empty,” he said.

Venables expressed concern about changing code to eliminate the department of economic development, and said the director position has value.

“You hate to argue about semantics, but words do matter, and priorities are set by the actions of the assembly, so one would hope that their actions will speak louder than the words did, because our economy is still a mess,” Venables said.

Venables said as an economic development director, “you try to work within the community, but also to reach out,” and he was encouraged by the borough’s recent efforts to recruit more business from the Yukon Territory.

Ned Rozbicki, president of the Haines Chamber of Commerce, said business leaders are skeptical whether the borough “is the right entity to tackle economic development.”

Venables said the borough, at the minimum, must provide infrastructure and support to spur private sector opportunities. “You build the roads, but the gas stations and the storefronts, they sprout up along the roadside,” Venables said.

Rozbicki said the borough has not been clear about how sales tax revenues should be used to further economic development. One percent of borough tax generates about $475,000 annually for tourism promotion and economic development.

“It’s basically been left up to the discretion of the manager, what he chooses to spend that money on,” Rozbicki said. “My impression is the public doesn’t feel well served in economic development initiatives or at least the business community doesn’t feel like the borough’s doing much for economic development.”

Among the largest of the $137,760 in economic development expenditures in fiscal year 2011 were $50,000 for a lobbyist, $45,000 for the comprehensive plan, $16,000 for a technical consultant, and $10,000 for travel and per diem, including a lobbying trip to Washington, D.C.

Between $81,849 and $98,771 went to economic development the previous three fiscal years. A numerical percentage of the 1 percent sales tax that should be used for economic development has never been defined by the borough assembly. City of Haines voters established use of the tax was for tourism promotion in 1986 and extended its use to include economic development iKn 2001.

Manager Earnest said he agrees borough funding for economic development is “really undefined.”

“You can say that the comprehensive plan is a roadmap for the future, and a large part of that future includes sustainability and employment opportunities and development,” he said. “It does qualify under the broad title of economic development, but people can always argue that point.”

During recent strategic planning efforts, assembly members identified economic development as their top priority.

Assembly member Steve Vick, in an interview this week, said he considers the borough’s development role improving borough infrastructure like Lutak Dock, Small Boat Harbor, Port Chilkoot Dock, local road maintenance and spurring downtown revitalization.

Economic development funds should be spent on plans for improving those facilities and forwarding those projects past the planning stages, he said.

“One of the problems is that government moves slow. It took us three years to get a boiler into the school at Mosquito Lake. Progress is slow, but progress is being made.”

Plans need to have buy-in from local business owners, he said. “We need to get them in to discuss their ideas and their needs so they have some ownership of the plans and of the projects.”

Assemblyman Jerry Lapp opposes the move to eliminate the department. He said provisional wording should be added to allow the borough to revive the department without a code change.

Besides improving infrastructure, he defines economic development as encouraging businesses to locate in Haines by offering tax incentives and advertising the town’s assets. “You’ve got to make them want to come here. You sell the idea that this would be a good place and we’ve got the infrastructure you need.”

Lapp said he hasn’t thought much about how money dedicated to economic development should be spent, but said it might go toward improving dock facilities.

Mayor Scott said infrastructure maintenance and development are the “economic development engine of the borough,” and improvements to the Port Chilkoot Dock and Small Boat Harbor are two examples.

“We’re all handling economic development; I think that’s the job of the borough, one way or the other,” she said. “Every tourism permit is economic development, every road project is economic development and funding the schools is economic development.”