Niagara Falls City Council members told Economic Development Director Peter Kay on Wednesday that his department isn’t meeting their expectations and that changes are needed.

They also implied those changes would be made in their upcoming budget cuts.

“We’re sinking a lot of money into this department and I think it’s pretty clear that people want to see more progress,” Councilman Chris Robins said.

Kay met with councilmembers to go over the economic development and planning department’s budget for 2010. Under Mayor Paul Dyster’s proposed plan, the department would continue to staff 10 full-time positions and one part-time employee and would see about a $30,000 increase in overall spending next year.

However, the discussion focused more on Kay’s accomplishments and management style since he was appointed to the new economic development director position. At several points, councilmembers reminded Kay he was being paid an annual salary of $100,000 and is expected to produce results.

“We’re paying you $100,000 and almost every building is still boarded up on Main Street,” Councilman Samuel Fruscione said.

Kay moved here from Ohio after being hired by Dyster 13 months ago to head a reconfigured economic department that added planning and businesses staff members under one umbrella. The department also includes Senior Planner Thomas DeSantis, Director of Business Development Fran Iusi and North Star Coordinator Kevin Cottrell, whose salary is partially reimbursed through an agreement with the Niagara Falls State Park.

Councilmembers have said they would be evaluating the job performance of numerous city employees and won’t hesitate cutting positions from the budget. Robins reminded his colleagues that cuts in the economic development department may not impact the 2010 budget since seven of the positions, including Kay’s, is funded out of casino cash.

Asked if Kay’s job is in jeopardy, Robins would only reiterate the position is among those the council is reviewing across the board.

“He’s in charge of economic development and we need to see more,” Robins said.

The council is expected to begin approving amendments to cut Dyster’s budget next month. One area in economic development that will be trimmed, councilmembers said, is a proposed $3,000 raise for Iusi, who currently earns $55,500. When asked about the increase, Kay said he didn’t realize it made it into the budget.

“I had advised against that,” he said.

Though the council’s frustrations appear to be about the entire department, Kay has taken the brunt of the criticism and was asked numerous times Wednesday to defend his work. For starters, council members said they were disappointed to hear Kay doesn’t hold weekly, or even monthly, meetings with his entire department staff.

Kay said senior members of the department meet weekly with Dyster to discuss projects. Though he is supposed to supervise the other 10 employees, only a few have offices in the same location at City Hall.

Asked what his plans are to increase productivity, Kay said he wants to create a client management system that would streamline the process a potential developer has to go through to obtain the proper permits and approvals. Under the system, clients would be assigned to a specific staff member who would be in charge of following up and reporting back.

Kay pointed out numerous major development projects have been announced in the past year, including Globe Specialty Metals, Ashland Advanced Materials and Santarosa Holdings. Three hotels — Inn on the River, Fallside Hotel and Econolodge — are also set to undergo expansions.

“We have over $100 million worth of projects going on right now,” Kay said. “In these economic times, and with a city of our size, that’s absolutely phenomenal.”

Councilmembers weren’t impressed, saying most of those projects were already proposed prior to Kay’s hiring.

“What deals have you brought to the table, that’s what we’re trying to calculate,” Fruscione said.

Kay responded by saying he’s worked on all of the projects as they progressed and is building a database of other potential investors.

“I don’t know of any economic development director that comes in with a portfolio of investors,” said Kay whose resume boasts more than 20 years of economic and community development experience in both the private and public sectors,

Councilman Charles Walker asked what Kay’s plans were to lead his department in the future and what “creative ideas” he had for attracting economic development and getting property speculators to move forward.

“Tying together the planning, economic development and the Underground Railroad isn’t functioning how we were told it was going to function,” Walker said.