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Committee favors encumbered funds to launch third-party incubator manager, reduces FY27 appropriation
Summary
Facing delays in hiring a third-party incubator manager, the committee favored using encumbered FY26 funds to start the contractor and reducing the FY27 appropriation; staff said about $500,000 of transition funding may be needed and asked for written reserve-accounting assurances from the executive.
The Economic Development Committee considered three budget options for the county's incubator programs and the planned third-party manager: continue the FY27 $2.0 million appropriation, reduce FY27 funding and use FY26 encumbered funds for transition, or eliminate FY27 funding and return the FY26 encumbrance to reserves. Given a delayed contract award, the committee favored option 2: use the FY26 encumbrance to start transition activities and reduce the FY27 appropriation, while preserving a one-time transition allocation and asking for a written OMB/County Executive confirmation on how released FY26 funds will be treated in reserves.
Council and OMB staff explained that $2.0 million was encumbered in FY26 for enhanced programming and that bringing a contractor on board could require an additional one-time transition amount (OMB estimated about $500,000) to cover start-up costs and program launch between June and July. Staff said ongoing FY27 support could total $2.0 million to $2.5 million depending on the contractor's negotiated scope and the committee discussed whether to release part of the encumbrance back to the general fund now or to preserve it for the transition.
Members asked for certainty for tenants and contractors and requested written confirmation from the County Executive/OMB that $1.5 million released from the FY26 encumbrance (if any) will be available within the FY27 reserves as part of the budget plan. The committee also asked staff to provide clearer budget notes and a transition timeline before full-council consideration.
What happens next: OMB and the County Executive's team will provide written confirmation of fund handling in time for the committee's full-council submission; staff will continue contract negotiations and provide a projected calendar and start-up-cost breakdown.
