SCARBOROUGH — Cuts are proposed for many town departments in the preliminary fiscal 2013 budget.

But the organization that may take the biggest funding hit isn’t a town department at all; it’s the quasi-municipal Scarborough Economic Development Corp.

SEDCO is an independent, taxpayer-funded nonprofit. Its funding could shrink nearly $58,800, or more than 25 percent, to just more than $175,000 in the budget year that begins July 1.

The next hardest-hit area in the budget is the Finance Department, which could see a 5 percent budget decrease.

A large portion of SEDCO’s cut, more than $35,000, will come from the salary of its president and executive director, Harvey Rosenfeld, who will scale back his hours to work part time next year.

Though the cuts are dramatic, the budget was hammered out and agreed upon by Rosenfeld and the town manager, Tom Hall.

“I’m very comfortable with this,” Rosenfeld said. “It’s not something that was forced on us. It’s something that was worked out cooperatively, and I think it’s a good response to the times we’re in right now.”

Rosenfeld, who has been considering retirement, said he took the Town Council’s goal of a flat budget as an opportunity to consider his position with SEDCO.

He said reducing SEDCO from two full-time employees – himself and Karen Martin, the communications and marketing manager – to 1 1/2 would give the town and SEDCO time to consider the organization’s future. 

SEDCO was incorporated in 1985. In addition to performing the outreach and logistic duties of a municipal economic development office, SEDCO also helps shepherd developers through the town’s planning and development process. The agency also acts as a liaison between businesses and the town.

The firm is considering allowing businesses to advertise in its online directory or its newsletter as a way to create revenue. There are also plans in the works for SEDCO to save money in rent payments by moving out of its offices on Black Point Road and into a vacant office suite in the town’s Municipal Building. 

That proposition suits Hall just fine. The town manager is a supporter of SEDCO, and usually attends meetings of the group’s board of directors. He said economic development is one of his top priorities.

“Scarborough, I think if you ask around, is viewed as a model for economic development,” Hall said. “… I want to focus heavily on economic development, in particularly on Haigis Parkway, in the next year. So I look forward to having SEDCO across the hall from me.”

SEDCO’s role can be seen throughout Scarborough: Cabela’s and the surrounding development, the Haigis Parkway, the industrial parks and many of the biotech and medical research facilities, including the Maine Medical Center campuses.

But the recession and the bursting of the housing bubble in 2008 has slowed economic development. Rather than seeking undeveloped tracts of land, which Scarborough has, Rosenfeld said that many businesses are looking to rent or buy existing space, of which Scarborough is in short supply. 

That means a lot of SEDCO’s time has been spent nurturing development plans that may take years before they come to fruition. An optometry business scheduled to be developed in town worked with SEDCO for years before its owners decided they didn’t see themselves in Scarborough. Several months later, they changed their minds and are now on track to open.

“That’s a small business, only about three or four employees, and it took two years,” Rosenfeld said. “But that’s where we are right now.”

Hall and Rosenfeld said the cuts in SEDCO’s budget could be temporary, with more funds available in future years as the economy turns around and the staffing level is decided. 

Town Councilor Karen D’Andrea, however, would like to see even more drastic changes. She is an outspoken critic of the group and its model of economic development. 

D’Andrea has criticized SEDCO for its relentless pursuit of biotech, research and retail businesses. She believes those sectors could burst like the housing sector did, and said Scarborough should seek to diversify the kinds of jobs offered in town.

Now, D’Andrea says she’d ultimately like to see SEDCO’s operations back under the umbrella of municipal operations, with its board of directors reduced to an advisory committee. She said doing so would save the town money. 

D’Andrea said she’d rather see SEDCO’s allocation moved to the School Department budget, where she said it will have a lasting effect on economic development by ensuring an educated workforce for the future.

And she says she’s not alone.

“I hear parent after parent, citizen after citizen, begging for more money for the schools,” D’Andrea said. “I don’t here anyone out there coming in to beg for more money for SEDCO. … At some point, we should listen.”

D’Andrea – and everyone else – will have an opportunity to alter SEDCO’s funding allocation when the Town Council takes up Hall’s budget proposal on Wednesday, April 4. She said she doesn’t know whether she’ll look to cut funding even more, but that she’ll continue looking for ways to “shift the way SEDCO does business.”

Mario Moretto can be reached at 781-3661 ext. 106 or [email protected]. Follow him on Twitter: @riocarmine.

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