The Montgomery County Council approved legislation Tuesday that will eliminate the county’s Department of Economic Development and replace it with a nonprofit economic development corporation run by a board of directors.
The move was made to reform the economic development process in the county, which has been criticized for failing to attract and retain businesses. It also aligns the county with other local jurisdictions such as Fairfax and Howard counties, which have created economic development entities that are more akin to private companies rather than government departments.
“Bringing the private sector in to lead our economic development will allow our county to be more nimble and adapt quickly to market changes and business community needs,” County Executive Ike Leggett said in a statement released after the council approved the legislation.
The nonprofit corporation will be made up of 11 volunteer board members who are appointed by the county executive and confirmed by the council. The organization is tasked with marketing and attracting new businesses to the county as well as helping existing businesses remain in the county and expand.
The Montgomery County Economic Development Corp., or MCEDC, as it’s being called, will also be responsible for drafting its bylaws. The legislation requires the bylaws to include prohibitions against self-dealing and personal enrichment as well as restrictions about other possible ethical concerns. The council will have the opportunity to review the bylaws.
The new corporation will have less responsibilities than the economic development department, which also handled financing, agricultural services, small and minority business development, workforce development and technology sector development.
The agricultural responsibilities of the department have been transferred to a new Office of Agriculture, which will consist of nine employees and handle agriculture issues.
The new corporation also won’t be able to dispense county funds to businesses—the county government will still be responsible for approving those grants and loans.
On Tuesday, many council members were concerned about what role, if any, the new corporation would play in helping small business.
“There are certain functions government should maintain when it comes to supporting our small businesses,” council member Nancy Navarro said.
After a lengthy discussion, council members decided not to add an amendment to the legislation regarding small businesses, but did say it’s an issue they’ll reconsider in the future.
Council member Nancy Floreen said Leggett agreed to transfer the staff position of “small business navigator” to his office to continue to provide small businesses with assistance while the issue gets debated.
The council did approve other amendments to the legislation regarding the nonprofit corporation, including those recommending the corporation fundraise for operating funds, that it follow open data practices and that it regularly provide benchmarking information about the progress it has made.
The legislation passed unanimously, with all seven council members present voting for it. The county’s chief administrative officer, Timothy Firestine, said he expects the corporation’s board to be appointed about a year after the bill takes effect in October.