Elgin plans to cut chamber funding by $125,000

The Elgin Area Chamber of Commerce will take a major funding hit based on a contract reduction from the city of Elgin, but officials hope to maintain high standards for economic development results in 2012.

City council members gave preliminary approval to a service agreement with the chamber for $275,000 — that’s a cut from the $400,000 the organization received last year. The chamber will be expected to provide support to small businesses, conduct business retention and outreach and implement foreign trade initiatives.

“It’s essentially the same deliverables at a reduced cost,” said Rick Kozal, Elgin’s assistant city manager.

Chamber President Carol Gieske said the reduced funding has necessitated cuts in staff time and will mean the chamber will have to do less. The vice president of economic development, Michael O’Kelley, is now working only part time, as is Leo Nelson, who was retained after stepping down as president to work on economic development projects. But Gieske said the organization still will be able to conduct quality economic development work, even with the budget cut.

“We are very fortunate to have a robust volunteer network,” Gieske said.

In a short presentation to the council, John Hurlbut, outgoing president of the chamber’s board of directors, highlighted the success of bringing the North American headquarters of Bystronic Inc. to Elgin last year. The company was initially expected to create 1,000 hotel stays per year based on its business activity but has doubled its projections, prompting at least one local hotel to consider adding a restaurant.

The chamber is also launching a new website next week for the Elgin Development Group, a private/public partnership between the chamber, the Downtown Neighborhood Association and the city. Hurlbut said the organization gives Elgin a competitive edge in attracting businesses to the city.

Councilmen Richard Dunne and John Prigge indicated support for putting the city’s economic development contract up for bid in future years to see if any other group would outdo the chamber.

“Competition never hurts,” Dunne said.

Council members unanimously supported the $275,000 agreement and will need to give final approval at the next council meeting.