Norwich - The Southeastern Connecticut Enterprise Region faced a "difficult year," one fraught with business and funding uncertainty, its outgoing chairman of the board John W. "Bill" Sheehan told the group's annual meeting Thursday.

"The economic downturn played havoc with attracting new business to southeastern Connecticut," Sheehan reported to the gathering of about 100 business leaders and politicians at the Norwich Holiday Inn.

SeCTer executive director John Markowicz noted that the group had to cancel an event to promote the region at the New York Yacht Club after getting a small response.

But marketing director Deborah Donovan unveiled a new film produced for SeCTer that attempts to introduce entrepreneurs to the local business climate. The film, which is available on SeCTer's Web site, features local business owners - including Duane Buckingham of Inncom in East Lyme, Tom Mosey of Mini Melts in Norwich and Rob Marelli of Seconn Fabrication in Waterford - talking about the talented local work force and local programs that have helped them thrive here.

"You have to feel good after you see it," Markowicz said.

In his annual report wrapping up the 2008-09 fiscal year, however, Markowicz pointed out that gaps in state assistance to local businesses made the period "financially challenging" for SeCTer. Most unsettling of all, the state in January cut funding for the statewide Procurement Technical Assistance Program that SeCTer runs while ordering it to maintain staffing levels.

SeCTer continued the program to help businesses get government contracts, he said, by investing nearly $90,000 of its own money, avoiding about 10 layoffs. The investment paid off, Sheehan said in his report, with more than $267 million in federal, state and local contracts awarded to SeCTer clients.

"That investment was truly remarkable," Markowicz said. "That program helps hundreds of companies to stay in business."

Another financial problem hit in April when the Defense Contract Audit Agency reported that SeCTer had overcharged it about $97,000 over a five-year period. Markowicz said he believes the government changed its rules for reimbursement after the fact, and SeCTer is contesting the demand for repayment.

SeCTer said it provided about $850,000 in funding commitments to four businesses over the past fiscal year. As the year came to a close, three other loan requests totaling about $900,000 were under consideration.

"The good news is we're maxed out of loan funds, and the bad news is we're maxed out of loan funds," said Sheehan.

In other business, a new slate of officers was voted in for the coming year. Mark Oefinger, town manager in Groton, will head up the SeCTer board as chairman; Robert Giffen of Dime Bank will be first vice chairman; Mary Ellen Jukoski of Mitchell College, second vice chairman; Sheehan, secretary, and Denny Hicks of the Chamber of Commerce of Eastern Connecticut, treasurer.

The board of directors will consist of Hicks, Sheehan and Giffen, along with Thomas Wagner, director of planning in Waterford; Robert Mills, executive director of the Norwich Community Development Corp.; Fred Allyn, mayor of Ledyard; Richard Matters, Franklin first selectman; Wayne Fraser, development manager of Readco Holdings; Maria Miranda of Miranda Creative, and George Galinsky, vice president of Mohegan Sun.