Michael John Dougherty, WVU Extension Service2009 Community Development Society Conference

Intent of ResearchOn‐going effort designed to create a database of spending levels in larger counties in West Virginia

Hope is to finally answer question on the relationship between development‐related spending and outcomesbetween development‐related spending and outcomes

Presentation focuses on pilot study of eight countiesPresentation focuses on pilot study of eight counties

July 27, 2009 2CDS – MJ Dougherty

West Virginia Context55 counties

Predominantly rural – mountains and river valleysV i i ( d il )Vary in size (under 100 to over 1,000 square miles)Vary in population (under 10,000 to over 200,000)

Development authorities authorized in 1963Development authorities authorized in 1963WVC §7‐12 (1963) gave power to counties, municipalities

State LED Grants fund counties development activitiesState LED Grants fund counties development activitiesMoney available to designated lead organization

July 27, 2009 3CDS – MJ Dougherty

Previous ResearchCDS 2005

Reported county spending on development‐related activities did not seem to impact vitality indicatorsactivities did not seem to impact vitality indicators

CDS 2007Reported county spending on development‐related Reported county spending on development‐related activities over long‐term showed some limited impacts but most of those plagued with “statistical” issues

ABFM 2008Questioned the accuracy and the appropriateness of the spending data used in the two previous studies of the spending data used in the two previous studies

July 27, 2009 4CDS – MJ Dougherty

Pilot Project DescriptionExamines eight counties comparing reported spending by county and development authority level

Selected based upon data availabilityOnly eight counties that had commission audits and Only eight counties that had commission audits and development authority audits available for FY2008

Hope to answer questions raised by ABFM 2008 study through these county‐specific comparisons (previous studies used aggregated county‐level data)

July 27, 2009 5CDS – MJ Dougherty

Counties in Pilot Study

July 27, 2009CDS – MJ Dougherty 6

Information on CountiesCounty

2008 Pop. Est.

County Spending

Total EDA Revenue Ratio

Change in Assets

Hampshire 22,574 $ 113,420 $ 694,544 6.12 $ 358,238

McDowell 22,707 $ 0 $ 2,108,498 ∞ $ 600,525

Monongalia 88,221 $ 138,500 $ 573,778 4.14 $ 176,279

Ohio 44,106 $ 46,333 $ 2,809,394 60.63 $ ‐3,702,853Ohio 44,106 $ 46,333 $ 2,809,394 60.63 $ 3,702,853

Pleasants 7,150 $ 15,000 $ 84,296 5.62 $ ‐17,902

Preston 30,285 $ 34,000 $ 196,314 5.77 $ ‐265,782

R d l h 8 6 8 Randolph 28,264 $ 15,000 $ 383,035 25.54 $ ‐42,132

Roane 15,169 $ 25,000 $ 167,985 6.72 $ ‐375,536

July 27, 2009 7CDS – MJ Dougherty

Point #1: EDA ≠ EDAAll development authorities examined were organized under provisions of WVC §7‐12

Only six actually were the designated economic development entity for their respective countydevelopment entity for their respective county

Mon. County is MAEP and Ohio County is REDResult is data is not as “rich” as it would seem to be

Presence of multiple entities complicates researchp p

July 27, 2009 8CDS – MJ Dougherty

Point #2: County Small PotatoesBudgeted spending on county development activities turns out to be a small portion of total EDA spending

One county reported no spending on development while only two counties reported over $100 000while only two counties reported over $100,000

Five of six counties where designated development Five of six counties where designated development organization was examined had reported county spending at level no greater than LED Grant match

July 27, 2009 9CDS – MJ Dougherty

County vs. EDA Spending

2,500,000

3,000,000

1,500,000

2,000,000

500,000

1,000,000

0

July 27, 2009 10CDS – MJ Dougherty

EDA to County Spending Ratio

607080

304050

102030

0

July 27, 2009 11CDS – MJ Dougherty

Point #3: EDAs EntrepreneurialDevelopment organizations cope with lack of county allocations by developing own sources of revenue

Seeking other grants/contributions and using interest from assets to finance activities was universal while from assets to finance activities was universal while generating rental/leasing income or by charging for services/administrative fees was also very common

As a result of this approach, development entities are more like a enterprise than a government agency

July 27, 2009 12CDS – MJ Dougherty

EDAs with Grants/Contributions

July 27, 2009CDS – MJ Dougherty 13

EDAs with Interest Income

July 27, 2009CDS – MJ Dougherty 14

EDAs with Rental Income

July 27, 2009CDS – MJ Dougherty 15

EDAs with Charges for Services

July 27, 2009CDS – MJ Dougherty 16

Next Steps in ResearchBecoming (increasingly and painfully) apparent that the approach of examining only county spending is both incomplete and inconsistentboth incomplete and inconsistent

Alternatives include looking at total amount spent by Alternatives include looking at total amount spent by development entity from all sources or looking at change in assets of development organization

Both would better capture the entire spending picture – the latter may even be a functional “barometer”

July 27, 2009 17CDS – MJ Dougherty

ContactMichael John Dougherty

Extension Professor/SpecialistWVU E i S i (CEWD)WVU Extension Service (CEWD)2104 Ag. Sciences Bldg. – PO Box 6108Morgantown WV 26506 6018Morgantown, WV 26506‐6018304‐293‐6131 Ext. 4215304‐293‐6954 Fax304 293 6954 FaxMichael.Dougherty@mail.wvu.edu

July 27, 2009CDS – MJ Dougherty 18