Independent Contractor will fill City Position

(Published in the 9/15/2010 issue of the Nugget Newspaper) By Bill Mintiens The Sisters City Council on September 8, in their first regular workshop following a month-long recess, decided that the economic development manager's position will be filled by an independent contractor hired by the city. The manager will not be a direct city employee. The position will also not fall under EDCO's (Economic Development for Central Oregon) banner. Although the printed workshop agenda listed discussion about the "Economic Development Services Agreement," many assumed the workshop would be an "unveiling" of EDCO's recommendation for the economic development manager. It wasn't. EDCO was assigned, earlier this summer, the task of writing the position description and independent contractor agreement, posting the listing, interviewing the twelve candidates that applied, and submitting a recommendation to the council. None of the five councilors were involved in any of those steps, nor were they aware of the candidates or members of the interviewing panel. EDCO directed people to an online position description (www.edcoinfo.com), stating that "the independent contractor will provide staffing of the Sisters Business & Attraction Team (SBART) and coordinate with the City of Sisters and EDCO to provide economic development services for the greater Sisters Country area. This 10-month, $30,000 contract-for-services period begins September 1, 2010, and ends June 30, 2011, and will be paid in equal monthly installments by EDCO with funding from the City of Sisters." The $30,000 will come from the City of Sisters' budget and is intended to cover the independent contractor's wages and all expenses. City Manager Eileen Stein began the workshop with a spreadsheet laying out for councilors the positives and negatives of the position's reporting structure. She wanted councilors to decide if the position status should be "employee" or "independent contractor" and whether the position should report to the City of Sisters or EDCO. A majority of the discussion centered on the risk of legal entanglements. If the manager became a city employee, the city would be responsible for an on-the-job injury or an unemployment claim. The city would also be responsible for payroll and other employment taxes for the position, not to mention supervising a position the city has little experience with. "We're not economic development people," said Mayor Lon Kellstrom. The council clearly wants a cap on the $30,000 budget - and no lawsuit down the road dealing with the basis for employment. At this time there are no other sources of funding for the position. The challenge for the council is how to provide oversight to a position that, at this point, doesn't have a direct reporting structure, measurable goals or receivables. Indicating a reporting structure, measurable benchmarks and goals could look to a court like an employee relationship. City Attorney Steve Bryant advised the councilors to be cautious. "Looking at the EDCO independent contractor agreement, it sure looks like the 'independent contractor' is more of an employee, not an independent contractor. If you really want accountability with the position, make the person an employee," said Bryant. Early in the discussion it appeared that Mayor Kellstrom was in favor of the manager becoming an employee. "Based on Steve's (Bryant) comments, I suggest that the independent contractor route is very difficult," said Kellstrom. Councilor Weed felt there was a simple test for determining whether the person should be an employee or independent contractor. "Seems to me that we need to determine what we want this person to do, then determine whether it's an employee or independent contractor relationship," she said. Councilors Bogart and Thompson both agreed with Council President Bill Merrill that the person should be an independent contractor. "I agree with Bill, we can still have oversight (of the position)," said Bogart. "I'm concerned with how much an employee would cost, what with roll-up costs for employees these days," said Thompson. Mayor Kellstrom, mulling the pros and cons, said, "But if we don't like what's going on and we try to direct the person, that's when we could cross the line (into an employee relationship)." The mayor asked City Attorney Bryant what he could do. "If we tighten-up the independent contractor's agreement to avoid employment claims, can we still do it?" Bryant replied, "Just determine, as a council, the receivables you expect and I'll write them into an independent contractor agreement. I can make the agreement as tight as possible, but I can't provide any guarantees. There's always an inherent risk that the person will claim to be an employee," said Bryant. Nearing the end of the hour-long workshop, Councilor Weed offered a suggested set of deliverables for the position. These included surveying the entire business community, two or three community-wide meetings, and creating a central information location for business grants and loans. "There was really not enough time to hash things out. I plan to draft a message to Lon (Kellstrom) and Eileen (Stein) outlining my concerns and ideas for the position," said Weed following the workshop. Roger Lee, EDCO executive director, attended the meeting. "Our economic development managers (Prineville, Redmond, Madras) have deliverables which include the number of new jobs created, number of new companies, etc., within a given year," he said. Mayor Kellstrom asked attorney Bryant to draft an independent contractor's agreement by September 30, with an effective date of the contract October 1, 2010. He also asked Bryant to look into including language that offers one- and two-year options. The mayor is expecting EDCO to have completed interviews with the 12 applicants before September 30, bringing their recommendation to the council by that time. Kellstrom indicated the goal was to have a person "on board" by October 1.

Handling of Position Riles Councilors

(This article appeared in the 8/4/10 issue of the Sisters Nugget Newspaper)

By Bill Mintiens EDCO (Economic Development for Central Oregon) has taken the reins and posted an advertisement in several publications, including The Nugget, for Sisters' part-time economic development manager. The ads began appearing Thursday, July 22. The ads state that "EDCO seeks the services of a results-driven professional services independent contractor to fill a part-time manager role for Sisters." The Sisters City Council budgeted and approved $30,000 for the 2010/2011 fiscal year for a part-time economic development manager. The fiscal year started on July 1. EDCO directs people to a more detailed online position description at www.edcoinfo.com, stating that "the independent contractor will provide staffing of the Sisters Business & Attraction Team (SBART) and coordinate with the City of Sisters and EDCO to provide economic development services for the greater Sisters Country area. This 10-month, $30,000 contract-for-services period begins September 1, 2010, and ends June 30, 2011, and will be paid in equal monthly installments by EDCO with funding from the City of Sisters." The need for the position, the actual position description, and the reporting structure have been controversial for several months. The council, wanting clarification on the duties, responsibilities, and reporting structure of the position, turned to Roger Lee of EDCO for assistance. When asked if all the city councilors had reviewed and agreed to EDCO's recently advertised position description (including reporting structure, office location, etc.), Mayor Lon Kellstrom said, "No, they haven't. My choice was to keep the council out of it in favor of an arm's-length relationship in the hiring of the economic development director. We need an arm's-length arrangement, through EDCO, to keep the council out of trouble. We don't want to be accused of using public funds to hire a 'friend' of the council." The mayor was referring to Mac Hay, SBART volunteer chairperson, clearly a leading candidate for this new position. The mayor added, "We decided to move ahead with the posting and hiring process based on the strength of Steve Bryant's (Sisters city attorney) assessment of EDCO's independent contractor agreement (also found on the EDCO Web site listing)." The mayor's decision to move ahead hasn't set well with two councilors. "How can they advertise for a position that has not been approved by the council or the EDCO board? Puzzling," said Councilor Sharlene Weed. "Looks to be a bit of 'cart before the horse' going on. I have not seen a job description, reporting structure, measurable outcomes, etc. I was very surprised that the position was included in the list of items that the city manager would be authorized to initiate during council's recess (ending September 9). This list was handed to council at the last minute, with no time to review. It appears that, for some reason, the mayor did not want the full council to weigh in on this issue." Council President Bill Merrill was similarly surprised. "This is all news to me," he said. "As far as I can recall, the council as a whole has never been briefed on any of this. The only job description I have seen is the one Patty Vandiver presented on May 6 to the budget committee. In that, she indicated that the director would be the chairperson for SBART. "The EDCO piece indicates that the person will be an independent contractor who '...will provide staffing of the SBART and coordinate with the City of Sisters and EDCO.' The Independent Contractor Agreement referred to at the bottom of the piece states 'The independent contractor will be free from direction and control...' but indicates EDCO will specify results. Whatever all that and more means, I haven't the faintest," Merrill said. Commenting on the entire process of selecting, interviewing, and the eventual reporting structure, Mayor Kellstrom added, "It's unlikely that the person will report to the council because we're not economic development people. The interviewing panel will be two or three people from EDCO and a couple of people from Sisters." Regardless of the person or firm chosen, it could be as many as four months into the fiscal year before measurable goals are defined for the position. The independent contractor form states: "Specific performance measures and deadlines for the 10-month period of this agreement will be developed within the first 60 days following execution of this agreement with the contractor, representatives of SBART and EDCO with review and/or input by the Sisters City Council." That leaves July through (potentially) October without a paid person concentrating on economic development challenges. "It just took a lot longer to formulate the position on EDCO's part and to cover all the legal aspects," said Mayor Kellstrom. "The good thing about it, though, is that Mac (Hay) is still doing his SBART stuff."

Will Sisters have an Economic Development Director?

(This article originally appeared in the Nugget Newspaper 7/20/2010)

By Bill Mintiens The Sisters City Council budgeted and approved $30,000 for the 2010/2011 fiscal year for a part-time economic development director. The 2010/2011 fiscal year started on July 1. The money is there, the director is not. Back on May 6, Patty Vandiver, chamber of commerce president and SBART (Sisters Business Attraction and Retention Team) project manager, wrote a letter to the Sisters City Council stating, "The Sisters Country Chamber of Commerce would like to request the consideration of $30,000 to be budgeted into the 2010/2011 fiscal year for a part-time, paid position for an economic development director." Having just entered into their yearly budget cycle, the council dutifully discussed the proposal during budget committee meetings and decided to add the part-time position into the city's 2010/2011 budget. But councilors and budget committee members had reservations. Vandiver's proposal stated that the economic director should be "under direction of the Sisters Country Chamber of Commerce Executive Board of Directors." Councilor Sharlene Weed was a vocal opponent. "I'm not in favor of budgeting $30,000 for this position; it seems like an extravagance during these economic times," she said. "And besides, I have a lot of questions about the position, there are too many unknowns for me. And I'm not in favor of the person reporting to a committee." Chris Tosello, a budget committee member, agreed with Weed. "I think there are too many gray areas about the position right now; we need clarification," said Tosello. Council President Bill Merrill saw the proposal differently. "I would not object to leaving the $30,000 in the budget. But I want to be sure we go through a selection process utilizing people like Jason Carr (Prineville's economic development director) and Lee Smith (La Pine's industrial group manager) who are familiar with the process and needs of the position. And I'd like to see the Sisters chamber add some matching funds for the position. There are a lot of questions that need to be answered between the chamber and the city council," said Merrill. The council, clearly wanting clarification on the duties, responsibilities, and reporting structure of the position turned to Roger Lee of EDCO (Economic Development for Central Oregon) for assistance. EDCO helps to fund and manage economic development director positions in Redmond, Prineville, and Madras. Successful programs in both Prineville (acquisition of the Facebook facility) and Redmond (Altrec, T-Mobile, and several other businesses) give EDCO experience and credibility with hiring and management. When asked about EDCO's role in Sisters' hiring process, Roger Lee, in an e-mail dated June 25, wrote, "We are still trying to work out some of the logistical and legal details. Our board has officially not yet decided to proceed, however I don't see any real roadblocks. I expect that we will have a decision at our July 8 board meeting. Assuming that EDCO is involved as discussed, we would look to advertise, conduct interviews and ideally hire by the first week of August. I would expect that EDCO would coordinate the interviews, but that most of the hiring panel would be comprised of leaders in Sisters." EDCO's July 8 annual meeting, held at St. Charles Medical Center in Bend, went longer than expected, allowing the EDCO board no time for discussion. Roger Lee briefly mentioned the Sisters issue but tabled the discussion. Eileen Stein, Sisters city manager, thinks she understands what Lee means by "legal details." In an e-mail dated July 13, Stein wrote, "Last week Mayor Kellstrom asked me to give our legal counsel an agreement to review. It was an agreement between the city and EDCO relative to the position. So this is what the 'legal' issues probably are." Three weeks into the 2010/2011 fiscal year, there is no sign that Sisters is close to hiring an economic development director. Councilor Sharlene Weed, still opposed to the position and frustrated by the process, recently commented: "We have not had a proposal. What is the plan? Job description? Reporting structure? Measurable outcomes? I would rather use the funds to reenergize our Community Action Team... pay for a part-time director. That person could help 'stimulate' a number of community projects (leadership, outside voice, public art, etc.) as well as 'economic development.'"