Politics & Government
7:36 am
Wed January 29, 2014

New Nonprofit CEO Slows Partial Privatization Of NC Commerce Dept.

Richard Lindenmuth began work in his position of interim CEO of the Economic Development Partnership in early January.
Credit NC Department of Commerce

Gov. Pat McCrory’s plan to move parts of the state’s business recruiting functions to a private nonprofit have been delayed, as the new organization’s managers are setting up a plan for the transition and finding costs to cut, officials said Tuesday.

Parts of the state Commerce Department will be transferred to the Economic Development Partnership no sooner than July this year, according to a department letter given to legislators Tuesday. Two of the department’s divisions had been scheduled to be moved by June and three more by December.

McCrory and Commerce Secretary Sharon Decker outlined a plan to form the new organization in December 2013 to take the economic development role of the department, attracting businesses from outside of the state and country. The reorganization would move dozens of jobs and millions of public dollars to the partnership, the Greensboro News & Record has reported.

Some state legislators, including Sen. Brent Jackson (R-Sampson County), have questioned the formation of the nonprofit because the bill – House Bill 127 – that would have formalized it was not signed into law.

The partnership’s interim CEO Richard Lindenmuth, a Raleigh businessman who started the job earlier this month, told lawmakers Tuesday that he is following the bill as a “template.” The partnership’s new leadership team needs more time than initially expected to form the partnership in order to communicate clearly and establish a plan, he said.

“Part of that approach is slowing things down,” Lindenmuth said. “My experience with speed is not well. It's hard to communicate with people that are concerned that we are doing the right things.”

The moves will cut expenses to roughly $17.5 million from $18.4 million, the letter given to lawmakers says. It includes a 10 percent reduction in personnel expenses, representing $550,000. Fifty-eight state workers are expected to be moved and one to be hired. One employee from business development and another from small business and entrepreneurship will not be included.

“One of the major tasks that this new transition team is undertaking is to identify the potential savings in public funds that can be realized by transitioning some of the core functions of the Department to the new public-private partnership,” the letter says.

Other reductions include contract negotiations and cutting costs in two offices in Germany.