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HomeMy WebLinkAboutEconomic Advisory Commission - Minutes - 04/21/2021 ECONOMIC ADVISORY COMMISSION TYPE OF MEETING – REGULAR April 21, 2021 - 4:00 - 6:00 pm via Zoom 4/21/21 – MINUTES Page 1 1. CALL TO ORDER 4:00 pm. 2. ROLL CALL • List of Board Members Present − Ted Settle − Aric Light − George Grossman − Julie Stackhouse − Connor Barry − John Parks − Braulio Rojas − Spencer Clark • List of Board Members Absent – Excused or Unexcused; if no contact with Chair has been made − Renee Walkup • List of Staff Members Present − Josh Birks - Director, Economic Sustainability − Travis Storin - Chief Financial Officer − SeonAh Kendal - City Recovery Manager • List of Guests − None 3. AGENDA REVIEW • No changes 4. PUBLIC PARTICIPATION • None 5. APPROVAL OF MINUTES a. As there were no corrections or objections to the previous minutes they were ECONOMIC ADVISORY BOARD TYPE OF MEETING – REGULAR 4/21/21 – MINUTES Page 2 approved as distributed. 6. UNFINISHED BUSINESS 7. NEW BUSINESS a. City financial update as a result of the pandemic - Travis Storin − The City's revenue comes from taxes and fees (approx. 50%), utility enterprise funds (approximately 50%) and grants and contributions (the balance). In 2021, the City continues to be pulling in less sales tax revenue than in 2019 because many businesses are still suffering from the COVID pandemic. − 2020 revenue began strong but when the shutdown happened, the City projected a revenue shortfall of $25 - $50 million (10-20%) and enacted $15 million in budget cuts, while being able to keep basic services intact. − Sales tax collection has had a wide range of outcomes across industries. Grocery, convenience and liquor store revenue actually grew, while restaurants, caterers and bars fell roughly 15%. Lodging was the hardest hit with a 50% decline. The City’s 3,000+ small businesses were the impacted the most. − The City is slowly recovering. It finished 2020 with a $16 million shortfall (6%), rather than the projected $30 million (12%) shortfall. − The good news is that, in 2021, the City has not had to dip into reserves to fund ongoing operations. Federal and state relief packages seem to be helping the local and regional economy, but with disparate impact. Cost containment efforts have had a significant impact on the bottom line. − Projecting into 2022, primary Budgeting for Outcomes (BFO) objectives include anticipating continued economic recovery (including internet sales revenue) and evaluating previous reductions relative to ongoing income, not reserves. Even though a shortfall is still anticipated, there are income opportunities. b. American Rescue Plan Act Preview - SeonAh Kendal − In mid-2020, the City of Fort Collins received $9 million from the Corona Virus Relief Fund that was we reinvested into small businesses, non-profits, and the general community. Because Fort Collins is less than 500,000 in population, these funds came from the state of Colorado, not the federal government, and had enhanced restrictions on the funds. − The City estimates it will receive approximately $27.5 million in American Rescue Plan Act (ARPA) funds from the federal government (1/2 now and 1/2 next year). The City is working to report back how and where these funds will ECONOMIC ADVISORY BOARD TYPE OF MEETING – REGULAR 4/21/21 – MINUTES Page 3 be spent according to the US Treasury guidelines, funds must be used by 12/31/2024. They need to be tied to the public health emergency and be COVID specific. Also, they can be used for revenue replacement, infrastructure, and essential workers. − Discussion − Ted - Q - Can you explain how Fort Collins sales tax is lagging behind the national recovery rate? A - Travis - It may be that Fort Collins' normal discretionary spending at places like restaurants is generally at a higher level than in some other parts of the country. Josh - Another theory is that nationally, COVID limitations were not as restrictive as those mandated in the State of Colorado. − George - Q - Was the 2021 $6 million marketplace facilitators income from businesses that are now paying sales tax that never paid them before? A - Yes. Sales tax from third-party online merchants' fulfillment businesses are now being collected when they were not before. Q - Any thought how to inform the Fort Collins community how these on-line sales affect jobs and businesses in their own community? A - SeonAh - This is being addressed through the "For Fort Collins" campaign and staff is exploring more ways to encourage people to shop locally. Josh submitted a BFO enhancement to revisit the 2012 Economic Health Strategic Plan because staff has learned more about this issue during COVID and will probably learn even more during recovery efforts. − Braulio - Q - How optimistic are you about the future as we get back to normal and what do you anticipate? A - SeonAh - Normal has changed. Recovery will look different for everybody, and staff is beginning to work on the recovery plan and focusing on those businesses that are hurting the most. Travis - Barring the unforeseen, optimism is well placed. − Connor - Q - What is methodology in restoring services and in which order? A - Travis - The City's BFO process proposes services, what it will cost and the expected outcomes. The City's revenue is then apportioned to the highest-ranked services per outcome area. Those services that were cancelled last year due to declining income, will again be proposed for 2022 and will compete again to be funded. Q - Will this BFO process be the same or different than before? A - The biggest difference is it is and the 7 BFO teams have been restored and it is less tactical to withstand reduced revenue. Q - Do you think Fort Collins is in a good labor market to match demand for recovery? A - SeonAh - The Larimer County Workforce Board has commissioned a study around skills mapping. City staff is looking at ECONOMIC ADVISORY BOARD TYPE OF MEETING – REGULAR 4/21/21 – MINUTES Page 4 occupational risks and health risks relative to COVID, ability to work from home, and if occupations are being eliminated because of COVID. There are labor shortages. Staff is doing an analysis where there are gaps and opportunities in the overall labor market. Josh - We are seeing higher unemployment in the lower wage jobs, especially for women. It is difficult to speculate what is temporary and what is permanent because the data is evolving. − Ted - Q - How do we know if we are a net winner or loser if local businesses sell their products online? A - George - I think we are net losers because there is more competition online. A - SeonAh - One challenge is how to support both because during the pandemic people were encouraged to change their shopping behavior to buy online. Josh - This is why we need to reexamine strategies to set us up for the future. − Aric - Q - Do you have any data from businesses about why there is a labor shortage? A - SeonAh - It is difficult to get this data right now, but we are investigating how to get it. − Julie - It is difficult to change behavior back to pre-pandemic practices. Regarding employment, employers may have to go to $15/hour in order to compete. This recovery will be interesting because it was not driven by financial forces but, rather, by pandemic forces. Business travel may not come back as before. − Connor is in business consulting and from his perspective general business and consulting travel will not come back the same because it can be done virtually. Sales and conference travel may come back because you cannot get the same experience online. − Josh - There will be a May 25 Council work session focused on recovery if the EAC would like to attend virtually. c. General Discussion - Top of Interest items for New Council − Josh explained that the new Council will have a retreat May 8 and 9 to discuss their priorities for the next few years so this is the time for the EAC to give them input to say what is important to them. − George - Q - Will the EAC retain the same Council Liaison and should the EAC reach out to Emily Gorgol to see if she will stay as liaison to the EAC? A - It is unknown at this time if Emily Gorgol will choose to stay with the EAC. Board and Commission selections will be held in June after priority selection happens. That would be time to reach out. ECONOMIC ADVISORY BOARD TYPE OF MEETING – REGULAR 4/21/21 – MINUTES Page 5 − John - Suggests that the Our Climate Future Plan be a top item of interest. − Spencer -Suggested that the county and City explore how to use international export markets to boost local businesses. − Ted - Would like to hear the Council's perspective on regionalism. This could be an opportunity for the city to anchor itself in northern Colorado. − Aric - Online education being done by local small businesses and more analysis of the labor force issue. − Julie - Q - What is the weakest link in Fort Collins' economic development? A - Josh - The pandemic has changed the way the economy functions and Josh anticipates that some changes may be permanent. Currently, he is concerned we are a shallow market with limited career paths in particular industries. − Josh - Us concerned that Fort Collins does not have the type of multi- cultural diversity that will retain a rising multi-cultural work force. This could potentially be a growing competitive disadvantage. It is both an opportunity and a challenge for northern Colorado. − Connor - Q - Does the commission want to draft a memo to council about this. − Braulio moved and Aric seconded a motion to craft a memo to Council, to be finalized and approved at the May meeting, that lists topics of priority to the Economic Advisory Board for their consideration as they establish their Council priorities. Motion passed unanimously 7-0-0 − Braulio volunteered to create the draft memo. 8. STAFF REPORTS 9. BOARD MEMBER REPORTS 10. OTHER BUSINESS a. 6-month Calendar review • Agenda planning − Josh reported the Equity Indicators report has been moved to the May EAC meeting. − Housing Strategic Plan Implementation (May) ECONOMIC ADVISORY BOARD TYPE OF MEETING – REGULAR 4/21/21 – MINUTES Page 6 − Equity Indicators Report (May) − Update on Chamber and Vision for the Future from Leadership Change (June) − East Mulberry Corridor Annexation Feasibility (TBD) − Our Climate Future (TBD) 11. ADJOURNMENT 6:00 pm.