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Lemhi County Economic Development Association (LCEDA) Executive Director Tammy Stringham and LCEDA Treasurer Joe Proksch regretfully brought distressing news to the Salmon City Councilís June 15 meeting.

For the first time in its history the Salmon Valley Business and Innovation Center (SVBIC) is facing a very serious budgetary shortfall which according to projections amounts to $20,136.60. Proksch explained that in the past couple of years the facility has been able to cover lesser shortfalls by using reserves. He said those reserves are quickly disappearing and the loss of two major rental clients is taking a toll.

He said in April 2014 the Call Center went out of business and a year later the second anchor client, Human Dynamics moved downtown. The overall loss is approximately $4,000 a month or from $48,000 to $49,000 a year. So far SVBIC has only been able to replace $1,000 of the $4,000 per month loss.

Proksch said the facility is operating at a loss and can continue to do so for a year or so but the management wanted the city to be forewarned about the financial problems. By raising Lemhi Rideís rent from $350 a month to $537 a month and initiating a $250 per month charge to the Lemhi Education Project Proksch said they have managed to lower the shortfall to $13,256 however; most of the facility expenses are fixed and therefore offer little opportunity to cut.

When the $2 million SVBIC opened its doors in 2003 its purpose was to support start-up businesses and stimulate local employment. Proksch said the center has not always done what was originally envisioned but it has provided local employment as well as educational services and conveniences. Stringham commented that because of the Internet there is no longer as much call for incubation centers and because most people prefer to work from home there is not as much demand for rental space. She said they are currently talking with Eastern Idaho Technical College (EITC) about establishing a community college and using space at the SVBIC as an Outreach Center. She said it will take several years for that to happen but itís a good possibility.

Stringham explained LCEDA is an umbrella organization under which four entities function: Lemhi Ride; the Lemhi Education Project; the SVBIC and the Economic Development Professional. She described how each entity is funded. She said Lemhi County pays LCEDA $12,000 a year for management of the Industrial Park and for the employment of an Economic Development Professional. Stringham said the county contribution serves as a match for Department of Commerce grants.

Proksch said the facility itself, which is owned by the city, is very expensive to operate and as per the initial lease agreement all operational and building maintenance costs are paid by SVBIC. He said maintenance costs alone, with the buildingís 12 ceiling mounted heat pumps, are the biggest expense.

The SVBIC asked the City Council to please consider discontinuing the $4,000 per year charge for water and agree to contribute $10,000 annually for repair and maintenance of the building. The agreement would be reconsidered annually until sufficient occupancy covers the shortfall.

The council agreed to review the SVBIC books and discuss the request at its June 23 budget meeting.

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