The privatization of Utah's national business recruitment efforts is moving closer to reality, but new requirements approved by the last Legislature could throw a few roadblocks in the way.
Members of the state's Board of Business and Economic Development voted Friday to negotiate a contract for national recruitment with the private Economic Development Corporation of Utah.EDCU won out over two other organizations that responded to a state request for proposals to develop the new Utah Business Development Partnership, according to business board member Ted Jacobsen of Jacobsen Construction in Salt Lake City.
That means the new partnership will include both state and EDCU employees. It is designed to use a combination of state funds and money raised from the private sector to create a "world-class" organization that will draw new companies to Utah.
Jacobsen said the combination also should eliminate confusion caused in the past when both the EDCU and the state's Division of Business and Economic Development have worked to recruit businesses.
But even as the proposal has moved ahead, some local economic development officials said they feared the EDCU would create an organization that focuses on Salt Lake County and ignores the needs of the rest of the state.
Jacobsen said the 1999 Legislature addressed some of those concerns by approving measures that will require additional oversight of the new partnership.
For example, SB137, sponsored by Sen. Steve Poulton, R-Holladay, says the division can privatize its recruitment efforts "only if the sole activity of the private entity is national recruitment."
And part of the appropriations bill that deals with the business division says state money will be available to the new partnership only on a one-to-one match, meaning the new organization will have to raise significant private funds to meet its estimated budget of $1.75 million or more.
The appropriations language says all books and records of the partnership must be open for inspection and audit by the state. And it states that, in addition to receiving approval from the business board, the contract with EDCU must be approved by majority vote of the boards of directors of at least three of the following organizations: Utah Small Cities Inc., Utah Alliance for Economic Development, Utah League of Cities and Towns, Utah Association of Counties and the Utah Center for Rural Life.
"We will propose a contract that gives equal rights to every area of the state," Jacobsen said. "(But) this is not a slam dunk. There are opponents of this."
Even if some people did not oppose it, he said, it is possible that the different cultures of the two combining organizations may doom the partnership after a one-year trial period.
Board member Tim Anderson, a St. George attorney, said privatization is never easy.
"I think we have done what we can to accommodate the issues raised by those with concerns," he said.
Jacobsen said a finished contract should be ready for review at the business board's April meeting.