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HomeMy WebLinkAboutEconomic Advisory Commission - Minutes - 10/15/2014Minutes City of Fort Collins Economic Advisory Commission October 15, 2014 CIC, City Hall 11:00am–1:30pm For Reference Blue Hovatter, Chair 493-3673 Karen Weitkunat, Mayor & Council Liaison 416-2154 SeonAh Kendall, Staff Liaison 416-2164 Dianne Tjalkens, Minutes 221-6734 Commission Members Present Commission Members Absent Blue Hovatter, Chair Jim Clark Michael Kulisheck (Mike) Denny Otsuga Linda Stanley Glen Colton Sam Solt (via phone 12:30) Michael Rechnitz Ann Hutchison (arrived 11:30) Guests Dale Adamy, citizen Staff Present Staff Absent SeonAh Kendall, Economic Policy & Project Manager Dianne Tjalkens, minutes Meeting called to order at 11:10am. Logistics Approval of minutes Linda moved to approve the September 17, 2014 minutes as presented. Glen seconded. Motion passed unanimously, 6-0-0. Ann and Sam arrived after vote. Public Comment—Mike O’Connell, Larimer SBDC: He is working with Josh and Economic Health on a BFO offer for City funding. They are also requesting County funding for their programming. They offer free confidential counseling and workshops for local businesses. Commission Member Updates • none Staff Updates—MOR— • SeonAh gave the following updates: o Staff has been working on the Economic Health Strategic Plan. It goes to Council October 28 for a work session. SeonAh will bring the draft back to the commission after the work session. o She spoke with the Colorado Lt. Governor at CSU and discussed sector partnerships: public/private education groups working on manufacturing and healthcare. She also discussed the labor study with him. He will be at UNC this week. o If the commission wants to make a recommendation on the budget, she needs to have it by tomorrow noon for Council packets. Agenda Item 1: Budget 2015-2016—SeonAh Kendall, Economic Policy &Project Manager The Economic Health Strategic Plan was used to guide the budget team. Programs and services that are currently funded are 2.75 FTEs including a .5 Admin, .25 Analyst, 1.0 Policy and Project Manager, and 1.0 Director. There is $60,000 to support RMI; $85,000 for the airport; and KFCG funded activities including winter market, NCEDC, and travel for staff to visit non-local company headquarters. In the past, there has been $15,000 funded for Shop Fort Collins, but that has been taken out, as well as some funding for NCEDC. The Economic Health Reserve Fund offer was significantly reduced then moved below the line to “unfunded.” Larimer SBDC which was unfunded, has moved above the line. The Land Readiness Analysis is also currently unfunded. This analysis was to conduct development-readiness assessments of employment and industrial zoned land in all of Fort Collins. Block 33 Redevelopment Plan market assessment and feasibility study fell below the line as well. Larimer SBDC is funded at $40,000. SBDC is ramping up free business consulting. Downtown has been designated a “Creative District” and staff has asked Larimer SBDC to partner in developing this. SBA and FRCC both offer funding to SBDC as well. They are requesting funding from Larimer County this year. Their new program is the idea of “Economic Gardening.” Mike O’Connell will bring presentations to the commission in 2015 should this remain funded. All staffing requests have been pulled. All contractual employees that have been at the City more than four years will be changed to classified through an administrative process, so this offer has been pulled. HR is developing the process. The Industry Cluster Coordinator position has also been pulled. KFCG Enhancement for Industry Cluster support and development is funded at $200,000. $175,000 will go into a competitive bid process and the remainder will be used to pay for seats on cluster boards. SeonAh added that staff has streamlined the application/allocation process. CSU Ventures Advance Industries is unfunded. Denny said CSU has worked on the State’s Advanced Industries Proof of Concept program. It provides funding to technologies that may have commercial impact, and funds experiments that yield data to show feasibility. Last year they expanded to advanced industry sectors. The life science program was incorporated. The program requires a funding match of 1 to 3. SeonAh said the City has an ongoing commitment to ownership of airport for general administration of $85,000 biennially. Fort Collins and Loveland are filling the gap since losing federal dollars when Allegiance left the airport. Fort Collins is funding an additional $92,500. This keeps the airport open until additional funding or support can be attained. A regional private sector group of stakeholders is developing a strategic plan. URA Operations is currently funded and is not dependent on general funds. The Broadband Strategic Fund is funded half by general fund and half by Utilities reserves. The request has been cut down to $300,000 and will fund development of a strategic plan with consultant assistance. Staff has been requested to move slowly. CSU is looking into broadband services as well. Comments/Discussion: • Linda is bothered by removing funding for Shop Fort Collins. SeonAh said that the group has received $15,000 each year, but they have not been able to utilize the funds. Other alternatives are being explored. Linda does not want the City to continue funding local bands’ visits to other communities (BandSwap). • Glen wonders about $60,000 to support RMI. It has historically been given to them, and we gave them the building. Do they still need the support? SeonAh answered that this is the first year they have a personal service agreement, so without meeting the metrics, there is no guarantee of funding. They do a lot of the administration of the mature Clusters, including marketing. • Mike asked about the metrics. SeonAh said NCEDC has metrics on marketing, business retention, trade mission, and does outreach on California headquarters. • Linda said she is glad the NCEDC funding is going down and should only be spent on things that apply to our economic plan that we cannot accomplish in house. • Glen is interested in what we are doing for more local agriculture and trade. SeonAh said a new cluster for local foods is being developed and SBDC is being asked to fulfill the “small business” role. If we continue to fund SBDC, they will move into the core offer in future budget cycles, but they will be paid quarterly and held to a service agreement. • Glen asked about funding toward local businesses. Blue added that the groups that have assisted with local businesses in the past are not being funded in this cycle. SeonAh said NoCo Food Cluster has taken over the nonprofit status of Be Local. The Shop Fort Collins group is not just focused on downtown and staff and partners would like to save this program and make it stronger. There are ongoing conversations. • Glen said in the past the commission has had presenters focused on small and local companies, local dollars, etc. There are a lot of steps that need to be done toward a local economy. Fort Collins has not moved in this direction. We need to focus more on local, rather than primary jobs that can be hired and fired on a whim. Import substitution is an important component: the more you can do within, the less you have to purchase from outside. We need an expert to kick- start and organize all these groups. • Linda and Mike agreed that pulling the funding for classified positions is not right. SeonAh said the City is trying to be fair and equitable to the employees and conscientious about adding FTEs responsibly. • Blue said a number of clusters are falling through the cracks. SeonAh said there are a Graduate Management Assistant and Senior Environmental Planner working with the local foods cluster. Josh will oversee mature clusters and program administration. SeonAh will be focused on sectors: Health Care and Manufacturing. Sam is focusing on emerging clusters. Energy (traditional and clean), Creative, and Trades are emerging sectors. The City has elected to not engage in the Trade sector at this time, as Denver is already developing a strong Trade sector. • Blue requested an update on the clusters and their functions. Ann would like to see the cluster reports. Blue added that January 2015 would be a good time for a cluster update. SeonAh said the commission can get a full overview of Economic Health and “Cluster 101” for new board members at that time. • Denny has heard that some clusters are not producing much impact or outcomes. He also heard that on the competitive bid side, people apply and then their budgets are cut so low that the funding doesn’t allow the work to be done. SeonAh said we funded NoCo Bio to do STEM projects that will train PSD teachers. That is very valuable. Some applications did not show the value add, or have requested funds to support a sole business. • Ann said she supports not providing general funding for cluster support. The funding is for specific projects to move technology or the cluster ahead. SeonAh said at the end of 2013 staff let all clusters know the City is moving to a competitive process. Beginning in 2015 everything is fair game except for the board seat. The application process identifies that we do not fund assets for a company, but regional projects. Staff will have an open pre-session process to allow applicants to ask questions and talk with those who have been successful. • Denny said he is not opposed to cutting the budget and aligning dollar amounts to specific projects, but if you continue to give small amounts to less impactful clusters, you dilute the impact of the more successful ones. SeonAh said staff called the companies and asked if they could move forward with the lower dollar amounts. These are difficult discussions. We want to make sure not to impact one person or business, but the community as a whole. The creative district applied for funding for Carnegie. Each one was different. Staff is looking at how to streamline the process. • Mike asked if we are funding the infrastructure. If you aren’t funding a specific company or infrastructure, what are you funding? SeonAh said not assets, but underlying systems and projects. • Ann said when the City came to the table years ago, it made sense to fund the existence of clusters, but they should be developed enough now to have the operations piece worked out. The City can now invest where the greatest impact can be made. • SeonAh added that Local Foods received funding to develop the emerging piece that the mature clusters already have. Mike asked if the process can see the difference between a mature and emerging cluster. SeonAh said yes. There are representatives from diverse departments and citizens on the board. Josh and Bruce then review the board recommendations. All of those who received funding last year will be brought together to do a process improvement evaluation. The City does not want to be the only one funding the cluster, so they require a dollar for dollar match. • Glen said he likes the direction this is heading. He sees that some of these clusters are so big now, that they should have their own consortiums. He would like the dollars to go where help is actually needed in our economy. Maybe there are holes in our economy where we should help and put significant dollars rather than spreading it all around. • Mike said the goal of the clusters is to help bump up the group by a level. Because of the support of the cluster and the resources available they can have better growth. SeonAh said the ideas that come out of cross-collaboration are huge. We are asking them to do projects because we want to see innovation and ideas. • Linda said then the question comes of how much of that would happen without funding. Some clusters don’t have a lot of resources, such as Local Food, where there is not a lot of private investment. These are the ones that should be receiving funding. SeonAh said to see Local Foods along with Water Innovation and Clean Energy talking about collaboration and mentorship was great. It is working. • Linda asked to see a summary of what happened as a result: What did the City give and what was the result? An example is that one building got an ICE air conditioner that had to be unplugged. A lot of money went into that. SeonAh said a requirement of the competitive bid process is that they must report out the impacts they have made. • Linda said that SpokesBuzz is wasting tax payer dollars. The public would not find benefit in this. We must consider the public benefit when spending tax dollars. Ann said we should never have set up a “Uniquely Fort Collins” cluster. It may not have been an effective use of those dollars. SeonAh added that their funding has been reduced and they have added an innovation swap. Blue asked if there is money set aside for this. SeonAh said it is in the competitive bid process, but she will share the concern with the group. • Linda said user fees for the airport should be paying for the airport. SeonAh said because there are so many fewer people in and out, there is less funding. FAA is talking about a new pilot program for remote towers so they can get a carrier back into the area. Linda asked what the common citizen gets out of this. Are taxpayers paying for private use? • Ann said this is gap funding while the airport determines its next life. We are just far enough away from DIA that we need that infrastructure to support the economic health of the area. These dollars buy us two years. Glen said the City added money in 2013/14 as well. SeonAh said that happened in a special session, not in the BFO process, as no one expected Allegiant to leave. • Ann said the airport game has changed in the recent past. There are not a lot of little airlines that will set up a hub in Fort Collins. SeonAh said all the hard questions are being asked. • Glen said Joe Schmoe thinks this is money down the drain. We should be spending money getting people safely to DIA. There might be billionaires who want to pay to be able to come in to Fort Collins rather than DIA, but it doesn’t benefit the everyday citizen. • Blue said that regarding the broadband analysis offer, technologies change. We have not had to fight to get these services. What does the $300,000 for broadband consulting get us? SeonAh said she thinks of broadband as a type of infrastructure such as streets. CSU lost internet service one day and the disruption and productivity loss was significant. The assessment will show if this is the direction to go and what kind of model should be implemented. We have to look at all of our fiber and where it is located. • Ann said Blue’s question about whether government should be playing in this area is valid. • Blue said this has the biggest questions about potential impact, and with the other tangible pieces that are falling below the line it doesn’t make sense. Assessing our developable land is more valuable to economic development. • Linda said she hopes this would go in stages so that the plug can be pulled if necessary. The price tag is huge. SeonAh said staff has developed milestones for go/no-go. This is not one consultant getting the full funding. There would be two or three consultants with expertise in many areas. • Blue said Comcast is paying Fort Collins to have our business. If a company wants to come into Fort Collins to provide this service they will come to us. • Ann said this has had no conversation at Council level. Will this be limited to the Utilities service area only, or all of Fort Collins city limits and GMA? SeonAh said some models do fiber-hoods, where they start in small areas; however there is an agreement that they have to cover the whole area in five years. • Ann said she wants to make sure the conversation involves the entire larger business community because internet service is less than reliable in parts of town. • Denny said he thinks there are types of technologies and services that are shown the government should not be part of and this is a fast moving technology area that falls into that category. He suggests evaluating alternative strategies first. You are failing to ask the market who they would like to provide the service and who is paying for it. Start with alternatives and find the best path to go, and then talk to business, etc. • Mike asked if in addition to this showing the government should be a provider, does it also give resources or offer the City a stronger position relative to a private company coming in. • SeonAh said after Seattle was identified as a Gigabit Squared community, Comcast came in as the provider. She added that the incumbent knows that this budget item is up. See www.fcgov.com/broadband for updates. • Michael asked if there are any local Fort Collins consultants who can provide this analysis. SeonAh said staff has done a request for information and there were local companies that responded. • Glen said he sees this broadband push as just a desire to be a leader. Sometimes you are better off being a mainstream technology adapter. This is the kind of money that should be invested in the local economy. SeonAh added that there is an important reliability piece of this for emergency services and the social aspect (education moving to online). Every community has been unique, even with the Google model. • Ann said she would like to see this as what we could be, but also looking at what the gaps are. Understanding our deficiencies needs to be completed. • Blue said we are doing a lot for private industry that they don’t need our help with and there are no guarantees that five years from now we won’t be back at square one. Looking at list of what didn’t get funded, this one does not make sense. • Ann said the board is generally supportive of the items included in the budget related to economic health with concerns about the broadband study and airport additional funding. The board is supportive of the competitive process moving forward with flexibility to make sure it is a successful effort. • Glen added that the board favors that the SBDC is moved above the line. Ann moved that the commission allow the Chair to draft a memo to Council regarding the Commission’s recommendations on Budget Offers, with agreement on final language agreed to via email. Michael seconded. Motion passed unanimously, 7-0-0. Linda left before motion. Comments regarding drafting recommendation: • Concern about funding for RMI. • Should make statement supporting personnel. Current levels do not show support from the City. • Concerns about pulling funding from Shop Fort Collins. • Need more general support for local economy. • Staff does not have bandwidth to support local initiatives. • More scrutiny of cluster support. • Ensure flexibility of competitive process to determine needs based on cluster stage. • Flagships are necessary for business, so if you are too careful about making sure it is the broad plan, sometimes the specific cannot happen. • There needs to be sustainability, and that can only happen when there is actual business contributing to the cluster. • Small and medium businesses should get the majority of the funding. • Airport support needs to be viewed as gap funding with a limited term. • Unanimous concern for broadband. • Unsure Fort Collins needs the amount of URA funding that is being used. We are pouring money on a hot real estate market. • Some new businesses are benefitting from other projects that used URA funds. • How we treat CSU Ventures Program speaks highly to how we feel about what our students are doing and whether we want to keep them here, and whether we choose to develop those businesses here. Overlooking this is very shortsighted. It will be seen as an area where we could have had an impact. We are missing a great opportunity. This practice is becoming commonplace at institutions that develop technology. • Can cluster dollars could be used for CSU Ventures. • CSU Ventures is a company. • CSU Ventures should look at the competitive bid process. • Interest in seeing examples in other communities. • MIT has multiple sources of funding, including keeping the patents on technology developed there. They also allow students to use the labs to do work for government projects. These dollars will be matched, so we are not working alone in this. This keeps those who are educated and born and grown here, here. This will be returned tenfold to the community. • Suggestion to add to the recommendation that if there is additional funding, the CSU Venture offer should be supported. • We do not need to keep all of the talent here. CSU is a statewide treasure and asset. • Expression of hesitation in adding items that have fallen below the line. • Suggestion to say we are supportive of leveraging additional dollars that benefit organizations such as CSU. • Blue drafted the recommendation and SeonAh will email to the commission for final edits. Agenda Item 2: Boards and Commissions Update—SeonAh Kendall, Economic Policy &Project Manager SeonAh gave the commission copies of the board alignment matrix provided by the City Clerk, and invited the commission to a super-board meeting October 27 for Nature in the City. Work plans will be due 1st quarter 2015. Comments/Discussion: • Ann asked if Council is done discussing the board realignment issue. SeonAh said there is still shifting. The matrix is a draft that shows the alignment of the boards to the strategic plan. Agenda Item 3: Commission Member Proposals for EAC 2015 Work Plan Not discussed. Agenda Item 4: Future Agenda Items November: EAC Work Plan (SeonAh will invite mayor) December: Economic Health Strategic Plan, Josh Birks Unscheduled: BOB2 (SeonAh will gather more information from Ginny) Meeting Adjourned: 1:37pm Next Meeting: November 19, 2014 11:00am–1:30pm, City Hall, CIC Room Approved by the Board on November 19, 2014 Signed ______________________________________ 11/25/2014 Dianne Tjalkens, Administrative Clerk II Date