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HomeMy WebLinkAbout03-01-12 Economic Development Council Minutes stt City of Bozeman Economic Development Council (EDC) Meeting Minutes March 1, 2012 10:30 am— 12:00 pm Madison room, City Hall, 121 N. Rouse Members Attending: Daryl Schliem (Bozeman Chamber of Commerce), Cheryl Ridgely (Bozeman Deaconess Hospital), Anders Lewendal (Contractor), Chris Mehl (City Commission), Stuart Leidner (Prospera Business Network), Teresa McKnight (Montana State University Innovation Campus), Tracy Menuez (Human Resource Development Council) Members Absent: John Hoagland(Vice-President of Simms) Staff Present: Chris Kukulski (City Manager), Brit Fontenot(Director of Economic Development and Community Relations),Aimee Kissel (Deputy City Clerk—taking minutes) Guests /Public Present: Warren Vaughan (Gallatin County), Jason Bacaj (Bozeman Daily Chronicle) NOTE: These minutes are not word for word and should be considered in addition to the audio recording of the meeting. A. Call to Order— Chairperson Daryl Schliem Mr. Schliem called the meeting to order at 10:33 a.m. B. Public Comment Daryl Schliem opened public comment. No person commented. Daryl Schliem closed public comment. D. FYI/Discussion 1. Deputy Mayor Jeff Krauss is the new Commission Liaison to the EDC; Commissioner Chris Mehl explained that Jeff Krauss will likely be the new Commission Liaison to the EDC but there may be a scheduling issue with Board of Regent meetings. 1 of 7 Minutes of the Economic Development Council for March 1, 2012 Commissioner Mehl says he has made his points clear and said the EDC is a very good board. 2. 2012 Economic Development Summit,March 22,2012 Brit Fontenot explained they are in the planning stage of the Economic Development Summit and asked members to view the draft agenda for the summit which is scheduled for March 22, 2012 (see attached). Holding the Summit satisfies two purposes. The first is to continue the work the EDC has been doing in holding the summits and the second is to satisfy requirements of the Northern Rocky Mountain Economic Development District, CEDS (Comprehensive Economic Development Strategy)process. The summit is scheduled from 10 a.m. to 2:30 in the afternoon with three rotating panels of industry leaders in the five sectors represented. Partners include Prospera, Gallatin County and the MSU Local Government Center. Questions to be asked include: what are the greatest assets within your sector, what barriers, and what actions can we take to further your industry, what are our roles in those efforts. A registration page has been created online for members to RSVP to this free event which includes a free lunch which is being partially sponsored by Clark's Fork. Bob Hietala from Gallatin College Programs will be speaking during lunch and Stuart Leidner with Prospera will be the MC for the event. A save the date notice will be going out in the next few days. They are still looking for panel participants. Mr. Leidner asked Ms. Ridgely if she or someone else from the health care industry can participate on a panel. In the technology area, Mr. Leidner asked Christoff Lambert, and would like someone from Bacterin, Ligocyte, and Pete Bruce from Bridger Photonics. Mr. Leidner said his challenge is the tourism side, and asked Mr. Schliem to suggest someone. Mr. Fontenot suggested someone from the retail side. OL Mr. Fontenot asked for input from the Council regarding the summit. Several people will be contacting specific people, but most of the participants will likely be reached using the power of listservs from Prospera and the Chamber of Commerce, etc. Mr. Fontenot and Mr. Leidner said the intent is to have a follow up engagement will be planned for several weeks after the Summit. An evening session once we have utilized the roundtable discussions we can bring that back to the public to have participation from the public. The CEDS strategy is more than just our business sector there is a social component. Ms. McKnight referred to a similar summit in Utah with a common theme. She asked about University representation. Mr. Leidner explained education is included with healthcare and education. Kirk Miller from the School District and someone from the University could be part of the summit. Mr. Leidner explained there will be three panels with five people, three representatives from each sector with facilitating throughout looking at the specific questions to be addressed. Representatives will rotate for each panel discussion. Panel discussion one starts at 10:15, etc. For the CEDS process, in the next few days a group will come from the Montana Economic Developers Association for the Belgrade meeting then another will come to Livingston. Warren 2of7 Minutes of the Economic Development Council for March 1, 2012 Vaughn and the County will be working with Prospera to do other types of meetings in other parts of Gallatin County and then Park County. More information will be gathered across the region. 3. Mandeville Farm Project; Brit Fontenot explained we have received five proposals and are interviewing three of the firms. A big piece of the plan is longevity. They will select the final consultant in the next week or two. The three interviewees include the WJM Group who are partners with TD& H, Intrinsik and Grubb and Ellis; CTA Architects and their partners. The third is ThinkTank with their partners. We intend to have public involvement and the stakeholders involved. Kalispell is working on something similar—Mr. Fontenot sent out an article about this. 4. Site Selector; The site selector is ready to go. The MLS property feeds are being automatically updated now. The last piece is training the realtors so they can get the most value from this product. We will soon have a press release, and hand out business cards to get large scale knowledge of the program and availability. Mr. Leidner said he recently attended MEDA in Helena, and several other communities were impressed we pulled the site selector off, and are able to have realtors participate well in the project. There are 600 properties populated. One piece we still need to address is protocol for working with non realtor represented properties so someone who has a building and no realtor might be able to manually feed data because it can't go through the MLS system. Mr. Lewendal asked about analytics that may be possible with the site selector. The software can collect analytics. Members clarified the site selector will be available to everyone,but only includes commercial buildings or properties for sale or lease. They also spoke how they do not want to exclude properties that do not go through a realtor, but they still need to figure out how to manage that. Trial and error will also help with what layers of data will be helpful on the site. 5. Northern Rocky Mountain Economic Development District(NRMEDD); and Brit Fontenot, board member of the NRMEDD said they are pursuing hiring a part time director with the CEDS process. They have narrowed down the scope to three people to interview. 6. Mr. Fontenot attended Eggs and was able to promote Issues Business Expansion and Retention. He also participated in the ROA Group at the Bank of Bozeman and provided a handout to them on the three principles of policy,partnerships, and programs. 7. Good Press lately—Great articles lately including Jason Bacaj's article in the Daily Chronicle and a nice editorial on February 27,2012 in the Chronicle. 3 of 7 Minutes of the Economic Development Council for March 1, 2012 Ms. Ridgely asked that we keep posting news regularly on the city website. 8. Agenda for the April 5,2012 and future EDC meetings. Mr. Fontenot asked members for ideas and input on agenda items. Cheryl Ridgely suggested that we focus on sector specific discussions. After the Summit is over, it may be good to have certain sectors that come out of the summit discussions, invite two or people from each sector invited to the meeting every other month for 30 minutes with Q and A— For example: Katie Walsch and Outdoor Pursuits could come speak specifically about what are the barriers and what could EDC work on, and then making sure we are plugging those things back into EDC's planning. Mr. Schliem said he and Mr. Fontenot will try to meet a week prior to the EDC meeting to get the agenda figured out, get it out to the Council and get feedback. The School District has asked if they could provide a 25 minute question and answer presentation during the next meeting to clarify the bond coming out soon. Mr. Schliem spoke about how, the city with the best education wins. Companies today are chasing the pool of educated kids. C. Non-Action Items 1. General discussion of the local option sales tax issue (Kukulski) Mr. Kukulski would like to see if this is still a discussion worth having. This discussion has been happening since 1979 and has failed in the past. The discussion point he would bring forward that is different than previous discussions, is that we would use all the collection to reduce property tax. In the past, it has been that cities and towns with less than a 5,500 population, after an economic assessment to prove they are heavily tourist based. This happens in Big Sky, Whitefish and some other areas. The current statute requires voter approval, and an ordinance to be created at the local level to indicate where the money will be spent. Another twist is that one of the most controversial pieces is taxing the retail side. He would like to take retail completely off the table to help keep it simple. Prepared food,prepared drinks,restaurants,bars and accommodations would be taxed. Current statute allows them to go up to 3 cents. (See attached spreadsheet from 2009.)A critical component is sharing the money with the rural parts of the State of Montana. It is still wise to have some type of sharing formula with everyone using the money for tax relief. Another issue is where current communities split money off I or 2%to the collectors (restaurants,hotels, etc.)It is not a complex tax to collect but the perspective may be there. Since we are talking 100%tax relief,may not need to do that. The way Whitefish works is you get a tax bill every year which lists all the mill levies with a line that says less last year's collected local option tax collected. You see each year the mill reduction and the dollar savings you save. The attached 2009 spreadsheet was from 2007 data or older. According to some data from yesterday, hotels are at 33 million in 2010. If you look at the line graph ending in 7 it has still grown through the recession. In 2007 there would have been a 35%reduction in city property taxes or 56 mills. A mill is about 2 to 3 dollars per person bringing in about $83,000 to the city. Other business data needs gathered. On the residential side one of the arguments faced is locals go out to eat, drink and stay at hotels and they do not want to pay that options tax.Mr. Kukulski argues 4of7 Minutes of the Economic Development Council for March 1, 2012 that it would take a lot of eating out and staying in hotels ($10,000)for the tax savings to be eliminated for locals. The organized critics to the discussions in the past have been the Montana Taxpayers Association arguing they would like a uniform system such as a state wide sales tax system. Mr. Kukulski argues that having the state divvy the money leaves questions about how the money will be distributed. In the past in Kalispell,all seven trade area chambers supporting the local option bill but the State Chamber of Commerce worked to kill it. The Farm Bureau also fights the local option tax over the rural vs. urban scenario. Mr. Kukulski hopes they will understand there is value on this because while a rural farmer may pay a tax on their dinner but they will get relief on their property taxes and they will not be paying on retail items. This is not a general sales tax. It would also need approval by local voters. Chris Mehl says the state legislature was adamantly opposed to this in the past. Mr. Kukulski said this will be a challenge but is hoping the game changer will be 100%tax relief. The other critic is that the utility companies are the highest property tax payers and people do not want tax relief to go to the utilities. In reality the percentage is very small. Mr. Kukulski said he brought this to the Chamber of Commerce Board. There is a lot of pessimism about this discussion. The League of Cities has supported the notion this could be done at either the County or City level and to protect the areas that are already using options tax. Mr. Lewendal asked what percentage of non residents are paying at bars and restaurants. The answer is unknown. Mr. Leidner confirmed that this will not pay for streets even though tourists do use infrastructure. Mr. Kukulski pointed out that this does not grow the local government which could help get this through the voters. While this means you cannot use the money for infrastructure you can still go back to the voters with bonds for those types of things. When you are under your cap the legislative body can vote to raise taxes on a bond issue. Ms. Ridgely said the strategy you are using is a good one and reaches the same endpoint. The simpler and less convoluted the strategy,the smarter the approach. Mr. Schliem said the current Chamber of Commerce board wanted to receive more information. Overall,this was a positive talk. The unjust is looking at the State Chamber of Commerce Board. Hoteliers he is not sure,the risk is not filling the hotels,but they have had sold out occupancy recently. The Chamber would like to see 100%tax relief in the end. Mr. Kukulski said we need to pull data on bars,restaurants and hotels and show them the numbers. Tracy Menuez feels this is a great plan and the data is clear,but she worries that we are fighting an uphill battle. 5 of 7 Minutes of the Economic Development Council for March 1, 2012 Chris Mehl would like to know what the Community Affordable Housing Advisory Board would think about this. Mr. Lewendal likes consumption taxes. He would have to spend millions of dollars to not gain but he asked about the costs for renters. Mr. Kukulski said the reality is aimed straight at those who pay property taxes. Hopefully,the savings would flow down to the renters in the form of lowered rent or fewer rent increases. Mr. Kukulski spoke regarding the experiences of Whitefish and perception issues. Mr. Lewendal spoke regarding talking to the SWMBIA Board. Mr. Kukulski spoke regarding a formula in the last bill which is important that where it is collected should be where the majority of the money would go back to. In past discussions they have used seven trade areas within the state as the boundaries. The first time Whitefish passed the options tax it barely passed and was very controversial. The current law sunsets after a decade. The second vote passed with a much higher margin because they saw it was doing what they wanted it to do. Mr. Kukulkki said conservative legislatures may be more willing to talk about this tax with a 100% tax reduction. Mr. Schliem said if we do not do something like this,we may have issues with all the schools, fire stations,police stations we need in the near future, looking at a ten year projection. This builds support for looking to the number one revenue generator in the state—tourism. Ms. Menuez feels the barriers will likely not be on a local level. Mr. Kukulski has done two citizen surveys on this question in the past. Tax relief was high,but public safety was actually higher. When the economy changes,by not funding services with the options tax, it will not affect the service side of it. This makes things more stable. Mr. Kukulski asked that council members think about this more and run it by other folks, as we need honest, frank feedback. F. Adjournment Daryl Schliem adjourned the meeting at 11:47 a.m. * NOTE—Full audio of this EDC meeting is available at: htlp://weblink.bozeman.net/WebLink8/0/fol/46967/Rowl.aspx 6 of 7 Minutes of the Economic Development Council for March 1, 2012 Daryl Schliem, Chairperson PREPARED BY: Aimee Kissel, Deputy City Clerk Approved on: Economic Development Council meetings are open to all members of the public. 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