The Island County Economic Development Council will lose out on an extra $40,000 as a result of being designated an “urban” area.

Sharon Hart, EDC executive director, told the Board of Island County Commissioners at a recent staff session that the inaccurate categorization was due to an outdated piece of legislation being referenced.

“Because of that inadvertent error, we fell through the cracks,” said John LaFond, EDC president.

The EDC reportedly received $63,000 in Associated Development Organization funds last biennium and will actually receive $84,272 this biennium, said Phyllis Cole, Washington State Department of Community Trade and Economic Development targeted programs manager. The money the EDC will not be receiving is a new and additional $40,000 for counties designated as rural.

“There is more money being given across the board,” Cole said. “The whole formula has changed.”

The categorization problem will have no effect on the larger rural counties economic development funds, which is the .08 percent sales tax rebate the county receives from the state to finance public facilities. Island County became eligible for the funds in 2001 when it was classified as a rural county. It received this classification because it is less than 225 square miles in size.

But in the case of the new $40,000 funding, Hart said lawmakers apparently forgot to include counties smaller than 225 square miles as part of the definition of rural.

The loss proved to be major for the county, preventing the EDC from utilizing the $40,000 that Hart said would have been used to expand the council’s outreach and marketing services.

“We got rural funds last year, but not this year,” Hart said. “I was shocked. We’re the first canary in the coal mine, but it’s going to filter down.”

The Community Economic Revitalization Board’s formula specifies that a county is rural only if it has less than 100 people per square mile.

Sen. Mary Margaret Haugen has reportedly pledged to work with the Legislature to fix the disparity.