Funding disagreement leads to division between city and NDC

Heated exchanges between the city administrator and the executives of Newton Development Corporation during a city council retreat last week showed a clear rift between the two entities, but both parties have since decided to move on from the quarrel and continue searching economic development opportunities.

The council retreat was requested by NDC in an effort to reestablish communications between the organization and the city.

However, the argument derived from the significant reduction in city funding to NDC, which was recommended to council by Newton City Administrator Matt Muckler. Although the council has yet to fully approve the fiscal year 2024 budget, NDC is expected to see its funding reduced to $77,000 from $110,000.

Tanya Michener, associate director of NDC, said the organization was told the reduction was because of the city’s focus on tourism. The city council has since followed through with this emphasis by allotting $20,000 for a new tourism grant program, which would offer grants to event organizers.

At the city council retreat, Muckler said the reduction was also the result of “poor performance.” When NDC Executive Director Frank Liebl was asked why he thought the organization was receiving less funding, he turned the question back to council members who took staff’s recommendation without consulting NDC.

In a statement from NDC’s executive board, they said it was “unfortunate that we have a disagreement with the city over our funding and other issues.”

Board members highlighted the organization’s accomplishments and its role in bolstering economic development for Newton, which has “overcome a lot” in the past 10 to 15 years. The board and staff went on to say they “feel confident we can work through these issues and continue working towards Newton’s growth.”

In a follow-up interview, Muckler told Newton Daily News he had similar sentiments and wanted to move forward.

When asked why the city reduced its funding to NDC, Muckler said the city always looks at efficiencies and return-on-investments from various partner groups. At the end of the day, he said, the city’s partner payments have been creeping up over the years.

“So part of it has to do with how much we’re spending in that area — and we’re talking about all the partner payments, not just NDC,” he said. “In terms of all of them, in FY16 we had approximately $130,000 that we are spending on partners. Today, it’s over $265,000. So we’ve doubled our partner payments.”

Muckler went on to say it is something staff and council will have to review further in the FY25 budget.

“In the FY24 budget, we felt like there was some improvements that needed to be made with NDC, and so that’s why that reduction was made,” Muckler said.

Funding for NDC does not solely come from the City of Newton. The business community who believes in the mission of NDC provides the other half to the organization. In the executive board statement, it is also said other entities have made significant contributions to NDC over the years.

Currently, Liebl said there are about 50 NDC investors.

Established in 1961, NDC has been a proponent and facilitator of economic development. In the past the private corporation has collaborated with the city and the county over a number of projects and have brought businesses like TPI Composites, Trinity/Arcosa and Graphic Packaging to Newton.

Despite the disagreements between the city and NDC, leaders from both entities say they are ready to put the past behind them and work on the future.

“We want to move forward. We don’t want to get stuck,” Michener said, noting that although the retreat spurred arguments, there is good that can come from it. “I feel like there were things that needed to be aired out. I don’t think they’re completely aired out but I do think it was a really great start to move forward.”

Liebl added, “Sometimes from adversity good things happen. What we’re looking for is a path forward. Our board plays a big role in economic development for the community, and the city the county and whoever we work with play a role. We know that. Our long-range plan is the same. It’s how we get there sometimes.”

Muckler said, “When you look back, the city and NDC have had a longstanding relationship on commercial and economic development. That is going to continue in the future. There’s constant communication going back and forth. There’s been other times where we’ve had to sit down and had to have conversations like we did on Monday night. In terms of where the city’s focus is now, we’re looking forward to how we can work together better.”

Read the full statement from the NDC Executive Board here:

It’s unfortunate that we have a disagreement with the city over our funding and other issues. If you look at our accomplishments over the years the Newton Development Corporation played a big role in economic development for the City of Newton, however we didn’t do it alone. A private/public partnership is the best way for cities (to) have success in economic development.

Over the years we have received about half our funding from the city and the other half from the business community that believe in what NDC does. Our board and investors are made up of several people that either are lifelong residents of Newton or people that have lived here for a long time. In addition, we have other entities that make significant contributions to NDC.

Newton has overcome a lot in the last 10 to 15 years, but things continue to trend upward. Newton is at its highest population ever, and we have several projects we are working on that will continue Newton on an upward trend.

The board and our staff feel confident we can work through these issues and continue working towards Newton’s growth.