HomeMy WebLinkAbout5-6-13 edc memo and attachments re fy 14 ed budget
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Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Economic Development Council (EDC)
Brit Fontenot, Director of Economic Development
SUBJECT: Economic Development Priorities & Funding Requests as submitted in the
Economic Development FY14 Budget Request
MEETING DATE: May 13, 2013
AGENDA ITEM TYPE: Action (as part of the FY14 Budget Presentations)
RECOMMENDATION: Consider the recommendations from the Economic Development
Council and the Director of Economic Development on priorities for the City of Bozeman for
funded economic development initiatives as proposed in the FY14 budget request.
(ATTACHMENT 1)
BACKGROUND:
On May 2, 2013 the EDC voted to support the priorities identified and ranked in this memo. The
EDC notes that each item on the list is a high economic development priority and warrants
funding. However, the EDC recognizes that the City Commission must consider many other
competing community priorities in the budget approval process.
Each item addressed below has the opportunity, on its own, to increase the impact of the City’s
economic development program and further the Commissions priorities of job creation and
industry diversification. However, the EDC recognizes that funding for all recommended
increases in programming and activities may not be practical. The Commission is urged to
consider the following prioritization for those areas which the EDC believe will have the
opportunity for the most direct positive impacts to the local economy and on local businesses and
the highest potential return on the investment of the City’s limited economic development
resources.
Overarching Strategies:
1. As clarified in Goal #1 of the City of Bozeman’s 2009 Economic Development Plan
(EDP): Support the expansion and retention of existing businesses and economic
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[sectors] that will continue to strengthen and diversify the economy and create higher
paying jobs in Bozeman;
2. Compete effectively when corporate owners, executives, and site selectors have targeted
Bozeman as a potential location for their business base or expansion site; and
3. Overall commitment to supporting Bozeman businesses, i.e. business friendliness.
Measures of Success:
1. Percent increase & actual job growth measured annually;
2. Salary data on newly created and total overall jobs; and
3. Percent increase & actual employee data for all businesses and targeted industry sectors.
Priorities are presented in their respective rank order:
I. Economic Development Specialist – 1.0 FTE
Rationale:
1. Actively supports Goal # 5 of the City of Bozeman Economic Development Plan:
Create a more collaborative and effective working partnership between the
business community and the City of Bozeman and effectively manage the City of
Bozeman’s regulatory environment to accomplish goals without hindering
business expansion and economic growth;
2. While the City has made tremendous strides in improving its reputation toward
becoming “business friendly”, the efforts need to be continual and broadened to
meet the scope and demand that is required to continue to remove barriers and
improve efficiencies. The primary catalyst for making this happen is dedicated
resources to build effective business relationships and to maintain consistency and
continuity when executing the economic development plan and initiatives; and
3. Timeliness requires resources. We have seen significant improvement in time to
market with new projects introduced to the City; and anecdotal comments are
favorable regarding interactions with the City Manager’s Economic Development
Team (EDT). The EDC believes that adding additional capacity by 1.0 FTE will
render positive results beyond the cost of investment.
Approximate Annual Expenditure: $70,000
II. Provide Continued Funding Support to Gallatin College (ATTACHMENT 2)
Rationale:
1. Supports Goal # 3 of the City of Bozeman Economic Development Plan – to
support education and workforce development initiatives to provide Bozeman
with the qualified workers to meet the needs of business; and
2. Allocation of resources will help encourage Gallatin College to develop and
maintain continuing education and certification programs for high-demand jobs.
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Approximate Expenditure: $125,000
III. Sector Development (ATTACHMENT 3)
Rationale:
1. Support and enhance economic growth of industry sectors that are experiencing or
generating local and expansion opportunities, i.e. photonics/optics and the outdoor
industry, and leverage the synergistic relationships for collaborative benefit;
2. Supports Goal # 1 of the City’s Economic Development Plan, and specifically
addresses the need to support and promote entrepreneurial efforts linked to
emerging markets, high technology, and research and development; and
3. Supports enhanced relationships with MSU and the collective impact of shared
mission and initiatives.
Approximate Annual Expenditure: $15,000
IV. Create EDC Marketing Collaborative
Rationale:
1. Realize a ‘collective impact’ through leveraged marketing initiatives of local and
regionally sponsored campaigns that share the same target markets of businesses
seeking to come to Bozeman and the surrounding region;
2. Develop a collaborative marketing strategy and branding effort, sharing resources
for leveraged media buys, creative development cost efficiencies, and greater
overall exposure and impact; and
3. Allocate resources to address the marketing content gaps that currently exist,
primarily a shared media library for images, videos, creative content, that can be
shared among collaborative partners including the City, Yellowstone Country,
TBID, Chamber, CVB, Downtown Bozeman Partnership, etc. along with the
development of a plan for joint marketing, communications, and brand strategy.
Approximate Annual Expenditure: $25,000
V. Allocate Resources for North Park Project
Rationale:
1. Supports Goal # 2 of the City’s economic development plan – to maintain and
upgrade infrastructure to support the current and future needs of business; and
2. Allocation of resources will help fill the gap or provide choice for manufacturing
or industrial businesses that identify specific location needs conducive to the
North Park model. Additionally, if completed, the North Park project
complements the MSU Innovation Campus efforts by providing additional
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alternatives for companies that may not meet the criteria for the Innovation
Campus, but should be enticed to locate or expand in Bozeman; and
3. Completion of the North Park preliminary engineering report (PER) accomplishes
the work necessary to position the City-owned portion of the North Park property
for sale or development.
Approximate Expenditure: $20,000
VI. Establish an Economic Development Incentive Fund
April 15, 2013 City Commission Policy Meeting, RE: Economic Development
Incentives (video link)
Rationale:
1. Generates a level of commitment to economic development by dedicating
resources specifically for economic development purposes;
2. While the EDC recognizes the importance of establishing an economic
development incentive program, general consensus is that there are numerous
federal, state, and local programs already in existence that can provide incentive
opportunities for businesses. The EDC recommends that a good starting point for
Bozeman would be to allocate a finite amount to be set aside on an annual basis to
develop a fund that can build into a more fully defined and robust incentive
program with specific parameters and performance indicators; and
3. In support of Goal # 4 of the City of Bozeman Economic Development Plan – to
leverage local, state, and federal economic development resources to enhance
economic growth in Bozeman – the EDC recommends that education about the
existing programs would be most beneficial at this time, and that through funding
the additional FTE position as noted in Priority I. above, this would help
Bozeman expand those educational opportunities to help businesses take full
advantage of the incentives that already exist.
Approximate Annual Expenditure: $25,000
UNRESOLVED ISSUES: Unresolved issues include the Commissions desire to increase
economic development resources, programs and activities. If the Commission is desirous of
increasing economic development resources, programs and activities: To what level and
what are the desired sources of funding to support proposed increases?
ALTERNATIVES: As directed by the Commission.
FISCAL EFFECTS: The fiscal effects of increased funding to support increased economic
development resources, programs and activities on the City’s budget are undetermined at this
time. Should the Commission allocate additional financial resources to fund proposed increases
to economic development resources, programs and activities, this increase will likely have
effects on either the General Fund or local tax rates.
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Report compiled on: May 2, 2013
Attachments:
1. FY 14 Budget Proposal;
2. FY 14 Gallatin College funding request; and
3. NRMEDD sector development proposal (photonics/optics and the outdoor industry).
I.FY 14 Proposed Budget for Economic
Development Operations; and
II.FY 14 Proposed Budget for Expansion
of Economic Development
Resources, Programs and Activities
Economic Development
FY 2014 Proposed Budget
Economic Development
FY 14 Proposed Budget for Economic
Development Operations
FY 13 Operational
Budget
$48,135 Operations
$125,000 (approximate
value of one and one half
mills) – Gallatin College
FY 14 Proposed
Operational Budget
$52,000 Operations
($3,865 increase from
FY 13)
$125,000 – Gallatin
College (will the
Commission approve
additional funding in
FY14? Where will it
come from? GF or
Millage Increase?)
In FY13 we….
Continued implementation of the adopted ED plan;
Conducted some community outreach;
Hosted an ED Summit;
Assisted with implementation of “business friendly processes”;
Completed the North Park concept land use plan;
Supported cluster development;
Created the South Bozeman Technology District;
Facilitated the development of a downtown hotel;
Assisted with the restructuring of the Community Development Dept.;
Raised the issue of impact fees and economic development;
Explored an EDIFM Program;
Lead the EDT;
Served as EDC liaison; and
Assisted with hiring a Community Development Director and implementation of the
structural changes proposed for the Community Development Dept;
In FY 14 we want to …..
Expand and increase ED outreach, activities and programs;
Continue to improve town/gown relationships, especially with the business college;
Actively participate in the BEAR program;
Expand and improve outreach to local, state and national business communities;
Attend and collaborate with local businesses on industry specific trade shows and events to promote Bozeman as a
place to do business, i.e. OIA Show;
Take advantage of professional development opportunities;
Participate in local industry conferences, i.e. Optec;
Assume responsibility of proactively managing at least two of the City’s TIF districts (Industrial and Technology);
Explore creation of a development authority/entity;
Facilitate development at the MSU Innovation Campus;
Facilitate the sale or development of the city-owned North Park proprty;
Facilitate development of a downtown hotel;
Foreign Trade Zone;
North Park TIF;
Improve broadband connectivity (broadband steering committee);
Improve and expand cluster development, especially optics and the outdoor industry;
Hire an ED specialist to assist with implementation the ED plan;
Work more deliberately with the EDC; and
Explore the implementation of an ED incentive program.
FY 13 Costs - Where did the $48,135
go?
BUDGETED AND SPENT
$17,200 North Park Concept Land Use Plan and components (EA Ph 1,
Signage, Economic Impact Analysis, LMI Report, etc);
$1, 000 on Montana Site Selector fees and promotional materials and
GBRN promotional materials;
$1,000 on office furniture;
$700 on iPad and accessories; and
$500 on travel/training and misc. operational expenses.
BUDGETED AND UNSPENT
$15,000 identified for intern, outreach and events;
$8,200 travel and training; and
$4,500 contracted services.
Economic Development
FY 14 Proposed Budget for Economic
Development Operations
Increases in the 2014 Economic Development operating budget are due
to a stated desire by the City Commission to increase resources,
activities and programs.
A $3,865 increase in the FY 14 operational budget accounts for slight
improvement and expansion of ongoing projects, i.e. Montana Site
Selector, Gallatin Business Resource Network, as well as increased
presence at industry specific trade shows, i.e. OIA and OpticsWest,
increased participation in local industry shows and conferences, and
increased education and outreach and hosting and/or sponsoring more
ED events. Additionally, the proposed increases include general
resources and professional training and development for staff working in
the area of Economic Development.
These proposed increases assume a new FTE to administer and expand
existing projects and programs and take advantage of increased training
opportunities.
Economic Development
FY 14 Proposed Budget for Expansion
of Economic Development Resources,
Programs and Activities
The proposed expansion of the 2014 Economic Development resources, activities and programs are
is in response to a stated desire by the City Commission to increase overall economic development
activities at the City of Bozeman. Expansion or increase in activities is predicated on approval for
adding an FTE to the ED Department.
There are five areas of proposed expansion:
Additional FTE (Economic Development Specialist) for a cost of approximately $70,000;
An additional $15,000 to expand sector development activities (esp. in photonics/optics and
the outdoor industry but also includes bioscience, manufacturing, high-tech and healthcare;
An Additional $25,000 to participate in a marketing collaborative to leverage partnerships
for the development of a collaborative marketing strategy and branding effort;
An additional $25,000 to create an ED incentive fund;
An additional $20,000 to continue or complete the North Park project; and
FY 14 Funding for Gallatin College at $125,000 (allocated in FY 13).
The costs for the proposed expansions, not including operational costs, totals $280,000.
Economic Development
FY 14 Proposed Budget for Expansion
of Economic Development Resources,
Programs and Activities
Proposed FY14 Budget
Proposed Operational Costs (General Fund): $52,000
Proposed expanded ED resources, activities and programs (GF or raise millage rate?):
FTE (ED Specialist) $70,000
Sector Development $15,000
Marketing Collaborative $25,000
Incentive Fund $25,000
North Park Project $20,000
Gallatin College (?) $125,000
Total FY14 Budget Request $332,000
FY 14 budget proposal less the GF request for operations $280,000
FY 14 budget proposal less the GF request for operations
and Gallatin College Funding $155,000
1 Mill = $ 86,226 or $3.71 per property owner/yr
2 Mills = $172, 452 or $7.42 per property owner/yr
3 Mills = $258,678 or $11.13 per property owner/yr
4 Mills = $344,904 or $14.84 per property owner/yr
Economic Development
FY 14 Proposed Budget for Expansion
of Economic Development Resources,
Programs and Activities
Proposed FY14 Budget w/o funding for Gallatin College
Proposed Operational Costs (GF?): $52,000
Proposed expanded ED resources activities and programs(GF or raise millage rate?):
FTE (ED Specialist) $70,000
Sector Development $15,000
Marketing Collaborative $25,000
Incentive Fund $25,000
North Park Project $20,000
Total FY14 Budget Request w/o GC funding $207,000
FY 14 Budget less the GF request for operations $155,000
1 Mill = $ 86,226 or $3.71 per property owner/yr
2 Mills = $172, 452 or $7.42 per property owner/yr
3 Mills = $258,678 or $11.13 per property owner/yr
4 Mills = $344,904 or $14.84 per property owner/yr
FY 14 Economic Development Budget
Proposed Funding Sources
•Continue to fund ongoing ED operations in the proposed amount of $52,000
from the General Fund;
AND
•For the purposes of increasing economic development resources, programs
and activities, increase the number of mills currently levied by a
commensurate number to fund the desired activities described above.
Currently the City levies 166.75 mills . An increase in the number of mills
levied (anywhere from one to four) for economic development, would result
in the total number of mills remaining below the statutory limit of 196.62
mills.
•The value of one mill is $86,226;
•In 2012, City residents living in the median residential home paid
approximately $3.71 for each mill levied. The same home would
expect the following yearly increase if additional revenue was raised
through mills to fund economic development:
•1 Mill = $ 86,226 or $3.71 per property owner/yr
•2 Mills = $172, 452 or $7.42 per property owner/yr
•3 Mills = $258,678 or $11.13 per property owner/yr
•4 Mills = $344,904 or $14.84 per property owner/yr
City Commission’s Economic
Development Objectives
Facilitate job creation and
encourage economic diversity;
AND
Strive to position Bozeman as the
“Most business friendly community
in the state of Montana”.
Economic development goals from the
2009 Economic Development Plan
Support the expansion and retention of existing businesses and economic
clusters that will continue to strengthen and diversify the economy and create
higher paying jobs in Bozeman;
Maintain and upgrade infrastructure to support current and future needs of
business;
Support education and workforce development initiatives to provide Bozeman
with the qualified workers to meet the needs of business;
Leverage local, state and federal economic development resources to enhance
economic growth in Bozeman;
Create a more collaborative and effective working partnership between the
business community and the City of Bozeman and effectively manage the City
of Bozeman’s regulatory environment to accomplish goals without hindering
business expansion and economic growth; and
Maintain the high quality of life that is considered an important asset to the
business community.
Economic Development Council’s
Priorities and Recommendations
Ongoing financial commitment to Economic Development;
Commitment to a business-friendly process with a focus on
retention and expansion of existing local businesses;
Stabilize existing local incubators and create a full service
business incubator program to achieve a healthy business
ecosystem;
Core Services and Infrastructure;
Identification and Establishment of Business Incentives; and
Workforce Development.
Why should we continue to invest in
economic development in the City of
Bozeman?
in·vest - /inˈvest/ To devote one's time, effort, energy and/or money to a
particular undertaking while creating expectations of worthwhile
results.
Local economic development activities build, and rebuild, strong community relationships and create
trusting, long-term community partnerships;
Economic development is intrinsic to long term sustainable development;
A strong economy benefits the entire community;
By investing public dollars in economic development, we invest in the future of our community. We must
develop and share a long term vision, commitment and promise in building a prosperous and diverse local
and regional economy;
Local economic development strategies, while no panacea, are a valid complement to traditional top-down
[Federal] strategies in order to deliver sustainable development and in many cases may deliver greater
economic efficiency by mobilizing local and regional resources that otherwise may have remained
untapped;
Local economic development offers a benefit that is quite valuable to local residents: more and better job
opportunities in their home community;
The cost and quality of life for every household is directly dependent on local economic conditions;
Business investment has many locational alternatives: We must play to our local strengths and leverage
partnerships;
Business activity creates the revenues to fund local services; and
Economic development is everyone's business.
“Serving Gallatin and Park Counties of Southwest Montana”
March 26, 2013
TO: Brit Fontenot, Director, City of Bozeman Economic Development
FM: Rob Gilmore, Executive Director, NRMEDD
Subject: Proposal to Establish Industry Sector Groups
Proposal:
This proposal amends by expanding the terms of the current agreement between the City of Bozeman
and the NRMEDD dated December 12, 2012. It is offered to assist the City in its efforts to establish
industry groups for both the Outdoor and Photonics sectors.
Project Owner: The City of Bozeman is the project Owner for deliverables and for managing compliance
of this agreement and its terms. It is agreed that other economic development organizations that are
acceptable to the City, including but not limited to, Prospera and the Bozeman Chamber (project
Partners) shall be integrated into the work process and solutions.
Industry Definition: The NRMEDD will work with the City and its Partner organizations to establish a
definition for each industry association. The definition will describe the specific types of business that
comprise the industry sector and that shall be targeted for the services outlined in this program.
Project Area: The project area is defined as the City of Bozeman and Gallatin County, however; it is
agreed that invitations will be extended to all known companies within Park County that meet the
industry definition.
Deliverables: The NRMEDD agrees to provide the following in conjunction with the City of Bozeman and
its Partners:
1. Define the industry sector.
2. Identify companies within in each industry sector within Gallatin and Park Counties.
3. Create database of industry including company names, key personnel, addresses, products,
contact data.
4. Develop and conduct an industry-specific survey. The specific questions shall be designed
cooperatively but shall:
“Serving Gallatin and Park Counties of Southwest Montana”
a. Identify business needs and, where possible, deliver solutions to mitigate problems.
b. Identify the willingness of local companies to participate in their respective industry
group.
5. Develop and conduct a survey to identify the industry supply chain. The survey shall be
designed to assist in identifying potential supplier-gaps in the supply chain and to promote
business recruitment activities.
6. Conduct a high-level impact analysis of each industry sector. The report will estimate the
economic impact of each industry within the local market.
7. Assist the City facilitate industry meetings with the Photonics and Outdoor Industries. The
purpose of the meetings shall be to:
a. Encourage elections of representative board members,
b. Encourage cooperation for marketing, supplier contracts, local industry image and
cooperative branding.
Time Schedule: This project and its deliverables are to be completed by an end date of Dec 31, 2013.
Fees: The NRMEDD agrees to the above deliverables for a $13,500. Fees and expenses above this
amount shall be borne by the NRMEDD.
Responsible Parties and Contacts: The NRMEDD contact shall be Rob Gilmore, Executive Director,
NRMEDD.
Termination: This agreement may be terminated on written notice at any time by either party. In the
event the agreement is terminated prior to the end date then a reconciliation shall be made to satisfy
outstanding obligations.
Respectfully submitted,
Rob Gilmore