By Cindy Schroeder
The Cincinnati Enquirer

COVINGTON - The Covington City Commission has approved a new $38 million budget, but only after two commissioners won assurances that the spending plan will be changed to improve the city's economic development efforts.

Commissioners gave their unanimous approval Tuesday night to a 2003-'04 budget that proposes no tax or fee increases and no staff reductions.

However, that vote was predicated on staff presenting a plan next month that addresses business retention and recruitment. Without major improvements in the economic development department, Commissioner Alex Edmondson said that he could not vote for the budget.

Both Edmondson and Commissioner Craig Bohman sought a pledge that the city's economic development department decrease its reliance on the Newport Steel fund, which was intended to provide loans for economic growth. Created more than 20 years ago, that fund has steadily shrunk, mostly because it has been used to help subsidize daily operations.

Commissioner Bernie Moorman also said he thinks Covington's 2.5 percent payroll tax hurts the city's efforts to keep and attract businesses. He voted for the budget after assurances from Finance Director Bob Due the city was not in trouble financially.

"Are there concerns?'' Due asked. "Yes. Are they manageable concerns? Yes.''

Moorman said that he's pleased with the recent hiring of Andy Riffe as an assistant city administrator overseeing economic development. However, he wants to see a strategic plan developed to better coordinate economic development efforts.

In calling for "major, serious changes in economic development,'' Edmondson suggested the city explore options such as setting aside some revenues from new businesses for a loan pool that would spur other economic growth. He also urged economic development staff to be more aggressive in contacting companies, publicizing local incentive programs and making sure that businesses' needs are met.

Without "a dramatic change in economic development,'' Edmondson predicted that Covington "will be left in the dust.''

Two weeks ago, Bohman proposed an alternative budget that included slashing $2 million and 20 city jobs. He later withdrew his proposal, saying he'd been misunderstood. Bohman said he wants to see City Manager Greg Jarvis study Covington's operational costs and help identify ways to make tax cuts feasible over time.

Commissioner Jerry Bamberger maintained Tuesday that Covington is "business friendly'' and does, in fact, recruit a lot of businesses. He also criticized Bohman's alternative budget, saying it was filled with fallacies. As one example, he said the city would have to eliminate 30 positions, not 20, to save $2 million.

E-mail cschroeder@enquirer.com