MEDC budget workshop focuses on FY2026 allocations, 10% sponsorship rule and grant reclassification

The Montgomery Economic Development Corporation on (date not specified) reviewed a proposed fiscal year 2026 budget and debated how to classify a $20,000 award that the agency has historically used for a mix of events, sponsorships and building improvements.

The discussion matters because MEDC staff told directors the board is operating with an audited balance of $3,000,473.76, a current-year surplus of about $720,000 and $230,000 already allocated for a land purchase, while anticipated revenue for the coming year is roughly $892,000. Mary Anne, MEDC staff, told the board that the agency must also follow a state statute that limits an economic development corporation to using up to 10% of annual revenues for promotion and sponsorship activities.

Directors reviewed the revenue forecast from a sales-tax tracking vendor and line-item changes in the draft budget. Staff recommended raising marketing and advertising, preserving legal-notice and publication funding for ordinance readings, keeping travel and training at $6,000 and retaining subscriptions at $1,200. Staff also noted a recurring $11,250 line for a GIS mapping agreement to maintain an interactive development map used by multiple city functions.

Board members discussed two downtown-related funding streams. One is a downtown development improvement line (about $96,000) intended for capital or facade projects and matching grants. The other is a $20,000 economic development grant line that, in practice, has often been used to sponsor events and to support non-event projects (for example, fence work near the cemetery). Mary Anne explained the legal distinction: "The 10% rule is that an economic development corporation by state statute can only use 10 or up to 10% of its annual revenues for promotion and sponsorship activities." She said that a payment to support a community parade or pay for security is a sponsorship subject to the 10% cap, while a grant that improves a building or funds a downtown façade is not.

Board members debated whether to relabel the $20,000 line as a sponsorship budget (which would count toward the 10% cap) or preserve it as an economic development grant fund that would not count against the 10%. After discussion a majority indicated they would "leave the 20 grand" in the economic development grant program and not treat it as part of the 10% sponsorship cap, and staff said they would revise line-item language and application forms to clarify sponsorship versus grant uses. Mary Anne and other staff said they will update the application forms and guidelines so sponsorships and grants use separate application checklists.

Other substantive budget items discussed included: the treatment of sales-tax rebate agreements (medicating reduced rebate amounts tied to Shops at Montgomery and Kroger), a recommended $52,000 transfer to capital projects for downtown improvement programming, expected legal fees for public-notice publications, and internal transfers for administrative support (10% for city secretary services; 25% historically for city administrator because that person also performs MEDC director duties). Staff also reported that quality-of-life events were budgeted at $76,000 last year but spending as of April was roughly $38,000–$40,000.

Directors gave staff direction rather than taking a formal vote on the draft budget. Staff said they will make the agreed clarifications and present a revised proposed budget at a council preview/workshop and then return to the MEDC for final action. The meeting record contains no formal budget adoption vote; the only recorded motion and vote was to adjourn the meeting.

The board asked staff to: provide a clearer breakdown of which line items count toward the 10% sponsorship cap; produce separate application/guideline documents for sponsorships and for development grants; and circulate updated budget materials to directors before the next meeting so they can act on a proposed budget in the coming week.