Alliance approves $1.7 million budget
by George Hohmann
Daily Mail Business Editor

The Charleston Area Alliance's Board of Directors has approved a $1.7 million budget for 2008, a 4.5 percent increase over this year.

The budget anticipates receiving $449,720 or 25.9 percent of revenues from government grants, including money from the Kanawha County Commission and the cities of Charleston and South Charleston; $426,022 or 24.6 percent from member dues and events; and $287,145 or 16.5 percent from rents and leases.

On the expense side, the budget anticipates spending $792,870 or 47.7 percent on wages and benefits and 29.9 percent on special projects.

The wages expense assumes 13 full-time-equivalent employees and an estimated 3.5 percent increase in wages, which will be used on a merit basis for salary, increases, employee bonus or cost-of-living increases.

Special projects include $189,400 for community development, $121,597 for member services and $101,550 for business development.

Matt Ballard, the Alliance's president and chief executive officer, said, "I think this is the most comprehensive budget we've put together since the Alliance was formed. I think it's a solid budget for the upcoming year."

The Alliance was formed three years ago to merge the efforts and interests of the Charleston Chamber of Commerce, the former Charleston Renaissance Corp. and the former Business and Industrial Development Corp., which was also known as BIDCO.

In his report to the board of directors, Ballard said The Dow Chemical Co.'s announcement earlier this month that it will cease most of its research operations in West Virginia was disappointing. But he praised the board for its foresight in helping establish the Mid-Atlantic Technology Research and Innovation Center, known as MATRIC.

The Alliance board, when Tom Potter chaired it, was instrumental in getting MATRIC started. The nonprofit organization was established more than three years ago to harness the brainpower that Union Carbide Corp. had brought to the Kanawha Valley over the decades.

MATRIC is patterned after the Research Triangle Institute at Research Triangle Park, N.C. That organization has attracted more than 100 high-tech companies that employ thousands of people in the Raleigh-Durham-Chapel Hill area.

MATRIC now has 72 employees. Following Dow's announcement, MATRIC's leaders said the organization hopes to pick up many of the 150 researchers who will be leaving Dow.

The Alliance was - and remains - one of MATRIC's key financial backers, having extended a $500,000 line of credit to the organization.

Charleston Mayor Danny Jones, a member of the Alliance board, asked if it's correct that MATRIC owes the Alliance $422,000. "Are we going to loan them more money?" he asked.

Board member John Skaff of Butler International said, "They're going to need more money."

Board member Mark Dempsey of Appalachian Power, who serves on MATRIC's Board of Directors, said MATRIC has a cash-flow problem because there's a lag between the time it does research and the time it is paid for its work.

Skaff said, "It depends on what MATRIC ends up obligating itself to, how cash-strapped it may be. We won't overextend ourselves. As far as money from the Alliance is concerned, nothing (new) is being put on the table at this time."

Ballard said MATRIC's line of credit comes due in May. He said MATRIC Chairman Paul Arbogast has requested a meeting in January to talk about the credit line.

Ronald Beane of JP Morgan Chase, vice chairman of the Alliance board, said MATRIC's current obligation is being handled as agreed. He said MATRIC had drawn $422,000 on the credit line and had not yet requested the $78,000 that remains available.

"Do we ever expect them to pay it back?" Jones asked.

"Yes," Dempsey said.

Skaff said Keith Pauley, MATRIC's president and chief executive officer, "knows where every dime is, where every dime has gone. He runs a pretty tight ship. The things that are on the table are not really a concern, but an opportunity to help. In an ideal world, MATRIC will turn out like the Research Triangle with thousands of jobs. I think we could be up to 200 people in the next few years."

Jones said, "Four hundred thousand dollars is a cheap buy - real cheap."

Ballard said MATRIC currently has available jobs posted on its Website, www.matric.us. Click on the "Employment" button at the top of the page.

Also at Tuesday's meeting, Ballard reported on his five-day trade mission to Italy in November. He said he had the opportunity to visit DPR, an Italian manufacturer of products used in the label industry. It was announced in April that the company would open an office in Charleston.

Ballard said he also had the opportunity to meet with members of the manufacturers association of Varese, Italy. Gov. Joe Manchin met with members of the Varese association during his trade mission to Italy last year.

The association has become a valuable ally, Ballard said. When Italian companies express an interest in locating in the United States, the association refers them to West Virginia.

Ballard said that during his visit, he had an opportunity to talk to companies about the value of the Euro, which has gained strength in recent months against the U.S. dollar. A strong Euro makes investments in the United States less expensive for companies in European Union.

Ballard said that as a result of his trip, one prospect visited the Kanawha Valley earlier this month and plans to return in January. "Four more companies will visit in January," he said. "They range from manufacturers to other types of companies. I have a feeling this trip will result in three or four companies coming to West Virginia."

In other news, Alliance Senior Vice President JoEllen Zacks reported on a membership survey. Seventy-one percent of respondents rated the Alliance "effective" or "very effective" in advancing its overall mission and in promoting economic development, she said.