By Brice Wallace
State economic development officials are considering making changes to a program aimed at helping businesses in rural Utah.
The Governor’s Office of Economic Development (GOED) board received a briefing about the proposed changes at its July meeting but did not vote on the matter.
GOED officials said alterations to the Rural Fast Track (RFT) grant program would make it more competitive, more transparent and more streamlined.
Some communities in rural Utah like the RFT program, “so we’re not trying to rock the boat too much,” Ginger Chinn, GOED’s managing director of business services, told the board. “We know that there is some work to be done on the Rural Fast Track, and we’re in the best place right now to look at ways that we can improve some of our programs. And I’m committed to making our programs A-plus.”
The Rural Fast Track grants are available to companies in rural Utah that have been in business for at least two years; have at least two current full-time employees; have had a net profit the past two years; and commit to hire at least one new, year-round, full-time employee at 10 percent above the county average wage. A business-development component provides a 50/50 matching grant of up to $50,000. The job-creation component has incentive amounts that grow based on higher pay levels for the created jobs.
Typically, grants have been used to help companies buy machinery, equipment or buildings, or help pay for facility expansion. Recipients have been in wide-ranging industries, including manufacturing, agriculture, engineering, oil and gas, leisure and hospitality and child care.
Among the proposed changes are revising the application process from monthly to twice a year, increasing the qualification standards and adding a scoring system by a review panel. The goal, officials said, is to make the grant program more competitive, accountable and transparent. Currently, GOED officials review applications and make recommendations to the Governor’s Rural Partnership Board. The GOED board then endorses that board’s decisions.
As explained to the GOED board, the current system would be in place until October, with the new process launched in April 2019.
“It’s time to take a serious look at the Fast Track [program] and make some changes,” said Nan Anderson, rural economic development outreach specialist at GOED. “This will be met with various reactions from our partners in rural [Utah]. We know we’ve got challenges, but we also understand it is time to tighten up the program.”
The RFT program from the 2016 fiscal year to the present time has featured incentives of about $1.9 million, 41 new jobs and private investment of nearly $6.5 million. Among surveyed companies, the majority said they have had an increase in sales since receiving a grant, all are still operating and all kept or replaced the new job position created through the program.
Board member Mel Lavitt said he appreciated the desire to improve the program, “but my sense is, if I was on the other side, you’re taking a program that’s working and you’re saying that you’ve got good numbers, and you’re saying you’ve got to make it more difficult.”
Val Hale, GOED’s executive director, said the program has performed well in recent years because of a better economy.
Several board members questioned whether to change the process timing, suggesting that it remain monthly or be quarterly rather than twice a year.
Anderson said the longer time frame “would offer an opportunity to a business to be really organized. Right now, we’ve got people who are coming through the application process that are not truly turn-key ready for these grants.”
But six months is a long time for small, rural businesses, some board members said.
“In any business, capital is the gasoline, and you can’t do it twice a year,” Lavitt said. “I would suggest you go back to monthly because people need what they need when they need it. If we’re going to do something, let’s make it helpful, not hurtful.”
Board chairman Jerry Oldroyd said the program should be competitive and needed the review board in order to help with transparency. He stressed that the program should not “pick winners and losers,” with winners being those who learned about the grant program. GOED board and staff members have for years stressed the need for better ways to inform rural Utah companies about the grants.
An idea that Hale broached is that perhaps the program should eliminate the $50,000 cap.
Chinn said the proposed RFT changes are part of an overall review of rural programs. GOED currently has eight. Anderson said the RFT program is the easiest one for business owners to understand. GOED officials, she said, are “trying to make the ones that work better and trying to eliminate those that maybe aren’t as beneficial as others.”