City Hall shakeup: municipality moves to take over EDC staff

Sault city councillors will be asked Monday to approve a major organizational shakeup that would significantly consolidate the municipality's control over economic development and tourism activities.

Under the proposal, Sault Ste. Marie Economic Development Corp.'s two divisions – Business Sault Ste. Marie and Tourism Sault Ste. Marie – will be stripped of all staff, with separate boards involved less in organizational oversight and more in advisory functions.

If the idea is approved, EDC and Tourism SSM staffers will become employees of the city's community development and enterprise services division.

Malcolm White, who took over as the city's chief administrative officer in July, says the city has been working closely with the EDC recently on issues including the Noront ferrochrome processing proposal, the Rural and Northern Immigration Pilot Program, tourism sector development projects, introduction of the new municipal accommodation tax and the Algoma Docks development.

"In addition, in that time period," White says, "the city launched the FutureSSM project to advance the recommendations from the Community Adjustment Committee and invest in its community development strategy. A project team of six was hired and they are leading a number of initiatives including community promotion, labour force development, arts and culture sector development, film industry attraction and social equity development."

"Through this dialogue and regular interaction, it has become apparent that a better model exists for economic development in Sault Ste. Marie. Businesses and residents look to the city as having the ultimate accountability for economic development and there is an opportunity to align the city’s community development strategy and the deployment of economic development and tourism resources, both human and financial."

EDC directors gave approval in principle to the idea at a closed-door meeting on Nov. 14, indicating they'd been assured the city will make "best efforts" to offer employment to current permanent EDC staff.

Says CAO White: "The migration to a new economic development and tourism model represents a step-change in our approach that will positively impact results. It will enable a 'one team' approach to community development, economic development and tourism development. In addition, given we have scarce and precious economic development resources, it will help ensure every dollar is spent in an optimal way."

The EDC's existing non-profit corporation will retain its more than $2 million in current reserves but will operate under a revised mandate.

Tourism SSM, which currently doesn't have a corporate entity or board of its own, will become a non-share capital corporation, retaining a $1.7 million reserve from the three per cent voluntary destination marketing fee (DMF) currently charged by most local hotels.

Effective Jan. 1, the DMF will be replaced by a mandatory four per cent accommodation tax on motel and hotel guests who stay 29 consecutive nights or less.

Here's how White sees the scaled-back responsibilities of the new boards:

Economic development non-profit board

• provide expert insight into the development of economic development strategies
• assess and recommend funding applications to the economic development fund
• approve the strategic investment of funds from Sault Ste. Marie Economic Development Corp. reserves
• review and approve economic development funding applications (e.g. Northern Ontario Heritage Fund Corp., FedNor) that would be submitted through the non-profit economic development corporation

Tourism non-profit board

• provide expert insight into the development of tourism strategies
• assess and recommend funding applications to the proposed tourism development fund
• approve the expenditure of funds from the balance of the $1.7 million in the destination marketing fee reserve
• review and approve tourism funding applications that would be submitted through the non-profit corporation

"The role of these non-profit corporations would evolve to providing strategic guidance to City Council on economic development and tourism strategies, making recommendations on economic development and tourism funding, making strategic investments with reserve funds and serving as a vehicle for funding applications," White says.

Councillors will be asked Monday to set aside $732,700 from accommodation tax revenues for the new tourism non-share capital corporation, with an additional $20,000 for first-year administrative costs, as well as $223,650 for a tourism development fund and an equal amount for tourism product development and promotion.

They'll also be asked to solicit applications for board members for vacant seats on the EDC board as well as the new tourism nonprofit.

City Council will have final say on successful applicants.

Monday's City Council meeting will be livestreamed on SooToday starting at 4:30 p.m.