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March 30, 2014

DAEDF hangs in the balance with sales tax vote

DUNCAN — In the cutthroat world of economic development, the Germans are the ones that got away.

Every day, the little Republic of Germany flag in his office reminds Lyle Roggow how close he and the Duncan Area Economic Development Foundation came to landing a very big German fish.

Mississippi has beaten Duncan three times in luring German manufacturing companies to set up shop. Mississippi outspent them.

But Roggow, 52, president of DAEDF, says he is not finished and insists one of these days he’ll land a German company.

For now, though, Roggow and those who support his mission are fighting off a challenge to the half-cent sales tax that keeps DAEDF afloat.

The half-penny tax has funded economic development in the Duncan area the past 20 years. Voters will decide Tuesday whether to keep paying it.

The tax question has been approved by wide margins in four previous referendums and supporters say prospects look good for approval of a 5-year extension on Tuesday.

But some opposition has surfaced, and adding a City Council race to the ballot throws an unknown factor in what the voter turnout may be, say local partisans.  

Moreover, some friction between DAEDF and the Duncan City Council has spilled into the public eye after campaign finance disclosures show many of the city’s leading business interests hope to oust incumbent Mike Nelson.

  “What’s going on, I can’t explain it,” says Roggow. “If there’s friction, we don’t want that. We have to work as a community to be a community. The mayor has been our greatest ally and supporter. I get along with all those guys. I talk to them.”

   Roggow is among the Duncan business leaders who is financially supporting the campaign of Chris Schreckengost, who is challenging Nelson along with Bill Schneekloth.

    Still, Roggow asserts that opposition to the half-cent sales tax is rooted in misunderstanding about the time-consuming nature and complexity of economic development.

    While Roggow has fallen short in closing multi-million dollar deals with the Germans, he points out that up 70 percent of new jobs are created for existing industries such as Halliburton, Cameron Measurements, Wilco and others within DAEDF’s circle.

     Even so, critics like Duncan insurance agent Peggy Davenport have publicly called DAEDF’s successes too few and too far between.

     Davenport is chair of “Citizens for a Better Duncan,” which launched a wave of automated “robo calls” this weekend that urge voters to vote “no” on Tuesday in order to vote “yes” at an unspecified future election in which a half-cent sales tax would be dedicated to fix Duncan’s streets and water system and not spent on economic development.

     The “no” vote camp is particularly dismissive of DAEDF’s latest project to build a “spec” building to attract manufacturing investment. The council last week approved a $54,776 payment for the $526,000 structure, which Roggow says already is drawing inquiries from manufacturers in need of a building.

     DAEDF defenders like banker Ben Herrington, who co-chairs the Duncan Citizens for Progress group,  say an objective look at the statistics refutes the broadbrush criticism levied by the sales tax foes. DAEDF has a 300 percent return on the $15 million it has invested since 1994, says Herrington.

   Whatever their differences have been,  DAEDF and the City Council this year agreed to split the annual $2 million sales tax extension will net, if the “yes” votes carry the day on Tuesday.

   DAEDF and the council also agreed to let City Manager Jim Frieda on the DAEDF board after recurring complaints the tax-supported foundation was too secretive.

    But there still was continued fallout when the council didn’t grant an early extension to the services contract that ties DAEDF with the city’s sales tax trust authority, whose governing board is comprised of City Council members.

   The contract will expire in July 2015.

    For some on the council, it made little sense to renew its contract with DAEDF before the fate of the half-cent sales tax is known.

    What if the sales tax extension isn’t approved on Tuesday?

    The city manager already has said he will return to the voters with another sales tax proposal to fix the streets and improve the water system. DAEDF foes have seized on that as a reason to vote “no” on Tuesday so the city can double its money for infrastructure fixes.

      DAEDF backers say that is woefully short-sighted.

      Without its share of the half-cent tax, the foundation’s ability to compete against other communities seeking economic development will be limited, Roggow says.

     Its annual membership dues amount only to $75,000, he notes.

    While $10 million is in the bank from past years’ sales tax collections, Roggow believes discontinuing the tax would be a step back.

     “We’re gaining momentum,” Roggow says, noting the workforce in Stephens County has increased by 6,300 jobs since DAEDF began. “Our economy has grown.”

    “I honestly think when April 2 rolls around,  we’re all going to be on the same page.”

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