The entity responsible for $16.5 million in business investment and at least 2,133 jobs between 1990 and January 2013 in Lenoir County took its next step in a massive reorganization.
The General Assembly — seeing the state Rural Economic Development Center as an organization too subject to political pressure — took a knife to it in the last legislative session, and moved much of the center’s money and responsibilities to the Commerce Department.
Monday, the REDC’s board of directors voted on and approved a transition framework, sketching out the basics of what will happen moving forward. According to REDC spokesman Matt Ehlers, the agreement is between the REDC, the state Commerce Department and the state Office of Budget Management.
“The Rural Center has approximately $85 million in grants that have already been awarded,” Ehlers said. “Those are from state appropriations. As part of this transition plan, that $85 million — once that agreement is signed — will be transferred to the Department of Commerce, and those grants will then be administered by the new Rural Economic Development Division, which is a part of Commerce.”
Duties of the REDC including grants for structure refurbishment and infrastructure construction and upgrade — for gas lines and water and sewer systems, for example — will be decided and awarded within the new Commerce Department division.
As of May 16, the City of Kinston still had $1 million of REDC grant money for a sewer system lift station at the Smithfield Foods facility — the city plans on awarding the construction bid in December. North Carolina’s Eastern Region — the economic development agency undergoing its own reorganization resulting from the state budget — had $215,108 on hand for its rural jobs accelerator and its WorkReady Communities initiative.
The vast majority of grants awarded to the City of Kinston, Lenoir County and other local organizations over the past 23 years went for infrastructure improvements.
Lenoir County Economic Development Executive Director Mark Pope said he hopes there aren’t too many changes between how the REDC worked and how the new Commerce Department division will operate.
“It has been a very valuable tool for economic development in our area,” Pope said. “Because when you look at the cost of water, sewer and even gas lines that we had to put in, without the Rural Center and some of these other grant sources, it would have been hard for local government to be able to do that.”
Pope mentioned the REDC’s assistance in a number of U.S. 70 Industrial Park projects, and how those created jobs for area residents.
“I hope as we move forward that relationship remains the same – I know the need will still be there,” Pope said.
The reorganization isn’t without its political characteristics. The move is indicative of a perceived notion the General Assembly’s Republican majority was consolidating decision-making processes in executive-branch level departments and agencies.
“Generally, the idea of the ‘executive’ branch executing and enforcing the law goes along with consolidation and centralization,” said Michael Bitzer, professor of politics and history at Catawba College. “So, from the governor’s point of view, this will help in terms of managing and overseeing, as well as having the power to put his stamp and political perspective on the activities.”
Bitzer said the possibility remains of influence on the division by a political appointee, negating claims of trying to remove the grants process from undue political pressure.
And though the Commerce Department is taking over the main purpose of the REDC, the organization will remain, albeit in a smaller role. The decision made Monday allows the agency to keep $3 million of interest earned on grants from one of its accounts, and split $8.6 million in interest in its other account with the Commerce Department, going forward with $7.3 million.
Ehlers said the goal of the agency once the reorganization is over is to invest in “rural entrepreneurship programs, small business loans, and rural leadership programs.”
Wes Wolfe can be reached at 252-559-1075 and Wes.Wolfe@Kinston.com. Follow him on Twitter @WolfeReports.