THE MISSISSIPPI LEGISLATURE

In Mississippi during the 1960s and 1970s, local governments under the nonprofit corporation act created ten planning and development districts for the purpose of assisting their member communities with planning economic development efforts throughout the state. Federal matching grant incentives were made available to the districts as well as the local governments if they met and maintained certain eligibility criteria, especially in the area of economic development.

The East Central PDD was incorporated in May 1968 and was organized as a nonprofit, nonshare, civic improvement corporation and serves citizens in Clarke, Jasper, Kemper, Lauderdale, Leake, Neshoba, Newton, Scott, and Smith counties.

According to the ECPDD’s bylaws, the membership of the corporation is composed of members from the public and private sectors within the district’s nine counties that desire to participate. The membership is made up of not less than seven nor more than twenty-five members from each county. In FY 2001, ECPDD had 142 members. All members are to have the concurrence of the county boards of supervisors.

Programs and services of ECPDD cover two broad areas: economic development and community planning and social service programs. This includes many different services to the community, such as geographic information system assistance, redistricting services, economic and community planning assistance, and social service programs.

In Fiscal Year 2001, ECPDD’s revenues totaled $8,023,458 and expenditures totaled $7,787,152. (ECPDD uses the federal fiscal year beginning October 1 and ending September 30.) The district’s largest sources of revenue in FY 2001 were $6,454,949 in federal grant revenues (80% of total revenues) and $444,681 in state grant revenues (6% of the total). FY 2001 expenditures consisted primarily of grant expenditures of $7,020,026 (90% of total expenditures) and capital outlay expenditures, $507,148, or 7% of the total.

Several external entities audit and monitor the ECPDD to ensure financial and program compliance. Since ECPDD receives federal funds, it is subject to annual audits that include reviews of financial compliance in accordance with Government Auditing Standards. State and federal agencies monitor all funds from the respective sources. For example, the Mississippi Development Authority monitors economic development projects, which typically include both state and federal funds.

ECPDD does not base requests for local contributions on comprehensive and timely expenditure or service needs data. Local decision-making on use of resources is inhibited because the ECPDD does not provide the local governments information upon which the request amount is based.

The ECPDD collects contributions from localities (counties, cities, and towns) located within the nine-county district. These local contribution funds are to be used for economic development and aging programs for the district. To collect these funds, the district issues annual request letters to the localities requesting a specified contribution amount. The localities then respond to the request letters with their contributions. ECPDD collects these contributions from localities within the district to match federal and state dollars for economic development and aging programs.

The ECPDD’s bylaws do not set forth a methodology for calculating localities’ contributions and the district has no procedure manual that includes this information. According to ECPDD staff, the district determines the amounts of the contribution requests based on population and previous contribution requests. However, ECPDD’s current method of determining annual contributions is unsound because the district does not base requests for contributions on county service levels and does not routinely review contribution requests to determine whether it should adjust these amounts annually. ECPDD does not include all appropriate factors in developing its local contribution requests, such as match requirements, in-kind donations, or demographics (other than total population).

The amounts of ECPDD’s requested annual contributions remained the same for eleven years. Then, in 2001, the request for annual contributions increased. ECPDD Board minutes state reasons for the increase in annual contribution requests, but ECPDD did not use these reasons with supporting documentation as the basis for allocating the increase in annual contributions.

When making requests for local contributions, ECPDD does not provide financial information or information on how the contribution will be applied to match federal dollars. ECPDD does not provide details to the localities as to the actual need or use of funds collected. While ECPDD does prepare and provide an annual report to district members, it only reports district totals and does not provide individual members with information about services provided in their jurisdiction.

1. The Legislature should amend MISS. CODE ANN. Section 17-9-1 (1972) to require that planning and development districts provide specified financial and program information to the boards of supervisors and the governing authorities of the municipalities that appropriate money to such districts. The information should include, but not be limited to:
   • budget request, which shows the need and the services for which local contributions funds will be spent;
   • annual report, not limited to but including the actual number of clients served in each county by the district and how the funds from each county have been used for those services and all current and active economic development projects and amounts awarded by county;
   • annual financial audit; and,
   • any other financial statements the localities deem necessary in order to determine the appropriateness of the request.

   The Legislature should require the districts to provide the above information to the localities at the time that the district makes its annual local contribution request. The law should require distribution of the information as a precondition to receiving any funds from local contributions for that fiscal year.

2. The East Central Planning and Development District should develop a methodology for the calculation of local contribution requests, which are to be for aging and economic development programs within the district. The methodology should include:
   • other sources of revenue;
   • need for the service in the locality (e.g., more clients on the waiting list for meals);
   • demographics of the locality;
   • previous year’s clients and service levels;
   • previous year’s expenditures; and,
   • previous year’s grant revenues that require a local contribution.

   ECPDD should formally adopt this methodology and incorporate it into its policy and procedure manual.