Duluth City Council increases its oversight of DEDA

The Duluth City Council continues to wrestle with the question of how much autonomy to grant the city’s economic development arm.

Less than one year after loosening their grip on the Duluth Economic Development Authority, city councilors unanimously voted last week to increase their oversight of the body.

Under pre-existing rules, DEDA was required to obtain City Council approval for any expenditure exceeding $100,000. But Councilor Jim Stauber successfully introduced a resolution expanding that requirement so the same threshold also applies to loans, sales of property, annual staffing expenses and the forgiveness of debt.

Todd Fedora, who is one of three councilors serving on the seven-member authority, joined Stauber as a co-sponsor of the resolution, saying he was particularly disheartened by DEDA’s recent approval of a $500,000 loan to developer Alex Giuliani. The money was to help complete work on the Clyde Park project in Lincoln Park, but Fedora felt the deal was approved with inadequate documentation.

Fedora was so disconcerted that he briefly considered resigning from DEDA.

“It was something I contemplated, but I’m not a quitter,” he said. “It’s still a fairly new group, and hopefully as a board we can gel together.”

Last year, DEDA went from consisting entirely of City Council members to being composed of three councilors and four citizen volunteers, all appointed by the mayor.

DEDA also has a new executive director in Brian Hanson.

Fedora said he respects all of DEDA’s members, but recent events convinced him of the need for additional council oversight.

City Councilor and DEDA member Jeff Anderson said he was supportive of restructuring DEDA last year to bring the perspectives of large and small businesses into the mix. But he said that as an elected body, the council has a fiduciary duty to perform.

“We need to be good guardians of public dollars,” he said. “It’s all about accountability.”

John Heino, DEDA president and CEO of Como Oil & Propane, agreed that city councilors have a legitimate role to play in overseeing economic development decisions involving public money.

“But I personally think that economic development efforts are more effective when politics are minimized,” he said. “I’m not naive though. I know that when tax dollars are involved, there are going to be political implications.”

The full effects of the changes recently approved by the City Council probably won’t be evident for several months or even years to come, Heino said. He noted that requiring more DEDA actions to go before the City Council for approval adds another step to the process, making the authority a bit less nimble.

“From a private-sector perspective, time is money,” Heino said, pointing out that Duluth often competes against other communities for the attention of developers.

“I just hope we can strike a balance between transparency and accountability and not inadvertently hurt our chances to be competitive,” he said.

Tags: city council, news, duluth, money