Economic Development Manager Amanda Jacobs presented the item. She noted that Oro Valley was the only Town in Pima County that did not have an Economic Development Commission (EDC) or Business Advisory Group. She stated that the purpose of an EDC would be to act as an advisory board to the Council, the Town Manager and the Economic Development Manager regarding issues that impact the business climate in Oro Valley. She stated that the preliminary scope of work included making recommendations regarding:
~Essential policies
~Rules and regulations
~Goal setting
~Policy
~Strategic planning
~Marketing and marketing analyses
~Future business recruitment
~Retention and expansion activities
~Reviewing legislative measures that may impact businesses
She noted that the Town had Strategic and General Plans in place that discussed economic development and the Community Economic Development Strategy.
She recommended that the commission avoid discussion regarding any pending economic development agreements or negotiations.
Ms. Jacobs reviewed the proposed composition of the commission:
~7 voting members consisting of:
*Oro Valley residents and business owners
*No more than 2 Oro Valley business owners that live outside town limits
*1 non-resident representing:
-A major utility
-A bank
-Real estate
-Small business
-Large business
-Higher education
~2 Non-voting members
*Town Manager or Economic Development Manager
*President of the Northern Pima County Chamber of Commerce
She noted the advantages of an EDC:
~Provided a focal point for economic development efforts
~Provided a consistent and inviting forum to the public
She noted that the drawback was that an additional meeting body would require staff and additional funding.
Councilmember Spoerl stated that she requested the item due to constant changes in economic development as well as the changes with the consolidation of the Development Services Department. She noted that she had heard that the Town needed to improve communications with the business community and the public and felt it was worth pursuing.
Councilmember Snider suggested that the Town host a summit prior to starting the commission. She stated that it would be an opportunity to listen to the goals of businesses.
Ms. Jacobs stated that Staff could look into it. She noted that the Economic Development division had a business retention and expansion program. She explained that the Economic Development Manager and a councilmember would meet with businesses to identify weaknesses and strengths in the Town.
Mayor Loomis noted that he spoke with neighboring municipalities that reported that the returns from EDC's had been limited.
Vice Mayor Garner stated that he envisioned the commission as more of a small business commission. He noted that currently there was not a defined focus for the commission. He stated that the initial stages would focus more on business than economic development.
Councilmember Carter agreed that a summit or roundtable should be conducted.
Councilmember Gillaspie stated his support for targeting small business. He noted that better communications were needed and agreed with the idea for a summit. He stated that the commission needed specific tasks. He noted his opposition to the wording in the staff report which stated that Staff would monitor legislative proposals that might affect local businesses.
Mayor Loomis opened the floor for public comment.
Oro Valley resident Bill Adler stated that action was needed and that the Town was in the process of eliminating advisory boards. He explained that adding commissions would create additional burden on staff.
Oro Valley resident John Musolf stated that it should be a streamlined working commission. He recommended designing a policy/procedure, holding the summit and then proceeding with the commission.
Oro Valley resident Lynn Ericksen stated that he was a proponent of economic development in Oro Valley. He noted that the concept should be approached cautiously. He explained that, in his experience, such a commission could be helpful, but could potentially be a hindrance. He stated that it was important to talk with the community to promote economic development in Oro Valley.
Oro Valley resident Lyra Done stated that the small business commission in Tucson rarely managed to have a quorum to hold a meeting. She noted that the members must be committed or it would be a worthless endeavor.
Oro Valley resident Helen Dankwerth stated that when she was on the Town Council, she initiated the Economic Development Think Tank to reinforce the General Plan and deal with issues raised by the directions of the General Plan. She noted that conducting a summit was an excellent idea and that it should emphasize the small business community. She commented that good will would be the deliverable.
Oro Valley resident Satish Hiremath stated that a commission was not needed at this time. He noted that the climate had changed and that Council seemed more approachable. He stated that Council and Staff should have direct communication with business owners rather than add another layer between government and business.
Oro Valley resident Chris DeSimone stated that the commission must have direction and tasks in order to be beneficial. He stated that an Economic Development Commission would advise Council about what was happening in the business world, marketing and public relations of the Town. He noted that reception and good direction was needed from Council for the Town to be business friendly. He stated that the summit must have focus.
Mayor Loomis reviewed recommendations brought forward from the Economic Development Think Tank as items to address at the summit:
~Continuation composition and expansion of an EDC
~Creation of small business advisory council
~Expansion of ombudsman efforts
~Annexation action of specific properties
~Continued use and expansion of existing incentive policy
~Revisions to the Community Economic Development Strategy
~Recommendations on adoption of new revenue sources
Mayor Loomis stated that Staff should compose a proposal identifying the cost and schedule for a summit and make recommendations to Council.
Councilmember Garner suggested holding a study session; having members of the business community attend and make their concerns known to Council. He stated that Ms. Jacobs could invite key players to attend. He noted that it would be the only item on the agenda so as to devise a charge and mission. He stated that from that point a summit could be created and the commission could be given a strong start.
Councilmember Snider stated that she envisioned bringing partners together to create a free exchange of information. She suggested that the summit should be conducted shortly after the new Council convenes in early July.
Mayor Loomis asked Council to identify representatives, organizations and/or groups they would prefer to have attend a study session and submit their recommendations to Ms. Jacobs in the next few weeks.
Interim Assistant Town Manager Stacey Lemos introduced the item.
Mayor Loomis stated that he was opposed to a Cost of Living Adjustment (COLA) as it was a recurring cost. He requested a bonus for Town Staff to reward their hard work and success of the past year. He recommended a 1.5% one-time bonus for employees which equated to approximately $300,000.
It was noted that the Contingency Funds would be the funding source.
Vice Mayor Garner stated that it was premature to consider this, due to Proposition 100 and the possibility of the State sweeping more State-shared revenues. He noted that he was not opposed to rewarding staff due to the recent projection of no COLA’s or merit raises for five years. He proposed that if staff could show that there were no budget pitfalls, then perhaps it could be a raise instead of a one time bonus.
Councilmember Carter concurred with a precautionary approach and suggested that this item should be left for the new council to decide.
Councilmember Snider stated that it was not sustainable for employees to continue without a raise. She suggested a 1% bonus that could be funded with monies allotted for management studies. She proposed that the studies could be deferred to the next fiscal year; thereby using those funds for the bonus. She noted that the money would then, not come from the Contingency fund. She explained that departments were already working with reductions and it might be wiser to consider using the funds for the management studies to reward all employees.
Discussion noted the following:
~A 1% bonus equated to $196,000.
~All revenues were used to fund the budget
*Analyses to discern whether revenue was recurring or non-recurring had not been conducted
~The budget includes recurring expenses tied to impacts from construction
~Concern for items dependent on Construction Sales taxes
~Construction Sales taxes projected to $3M - $3.5M annually
*Could be considered a recurring revenue source
Vice Mayor Garner stated that a decision was made to move forward with the management studies. He explained that a baseline study was needed.
Procurement Administrator Brian Garrity presented an update regarding the management studies for the Police department and the Parks and Recreation department:
~Prepared to notify firms and enter negotiations regarding the Police department
~The second meeting for Parks and Recreation was about to be advertised
He informed Council that:
~The Town could cancel the bids at any time without cause
~Bid amounts in the coming year could not be anticipated
~Proposals were not bids and were not awarded by the lowest quoted price, but rather qualifications, experience and method of approach
~The bid amounts previously quoted to Council would be within range
It was noted that:
~Due to staffing vacancies and department cuts, it was possible to incorporate these items without the use of Contingency reserves to balance the budget.
~Emergency Capital Project needs were the only items funded by reserves.
~There were few non-recurring expenditures this year
Councilmember Spoerl stated that there was general agreement among councilmembers for the bonus for employees. She noted that it was important to move forward with the management studies since the process had already begun.
Councilmember Snider suggested that Council should consider whether the studies were the best use of funds as staff was already working at reduced levels and fewer resources. She stated that Council should be aware that the findings may have recommendations that the town could not afford at this time.
Mayor Loomis called for a recess at 7:45 p.m. The meeting resumed at 7:48 p.m.
Mayor Loomis opened the floor for public comment.
Oro Valley resident John Musolf stated that Contingency funds should be used for bonuses and management studies.
Economic Development Manager Amanda Jacobs stated that it was requested to bring before Council the possibility of funding for the Metropolitan Tucson Visitors and Convention Bureau (MTCVB) and the Tucson Regional Economic Opportunities (TREO). She noted that Council approved Resolution (R)10-23 to fund agencies subject to performance measures by the Town Council. She noted that this resolution segregated economic development from the Community Funding policy.
She reviewed the responses of six municipalities regarding funding economic development agencies and the criteria, if any, that was required.
~2 municipalities fund a CVB from their Bed Tax fund
~1 municipality required performance measures
Ms. Jacobs stated that, based on the research, consideration could be given to funding the MTCVB with .5% of the Bed Tax fund which equated to $71,800. She noted that performance measures could be implemented. She reviewed the responses regarding MTCVB funding:
~5 municipalities fund regional economic development organizations
~4 municipalities have performance measures
Ms. Jacobs referred to a letter from TREO President Joe Snell sent to Council, notifying them that future funding would be based on $1.00 per capita. She suggested that Council consider the Pima Association of Governments (PAG) formula which would be the Town’s population multiplied by the amount per capita. She explained that for the Town this equated to $43,521.
She reviewed standard performance measures for regional economic development organizations:
~Job creation and retention
~Marketing and advertising
~Activity reports that define programs
She noted that Vice Mayor Garner requested that staff contact other municipalities and poll whether they had a competitive process. She explained that none of the six municipalities contacted had a competitive process. She noted that Mr. Garrity had polled the National Institute of Governmental Purchasing listserve and received one response from a municipality that had a competitive process in place for economic development marketing.
Discussion noted the following:
~There were insufficient funds for subsidizing outside economic development agencies and funds would have to come from the Bed Tax fund
~TREO was funded $40,000 for Fiscal Year 2009/10 and the MTCVB was allotted $72,000
~The proposed cost for TREO was $43,521 and for MTCVB was $71,800
~The amount per capita could still be negotiated
~According to the Town Code, financial participation agreements were not required to go out for bid
~A Request for Proposal (RFP) can encompass performance measures and a clause to have money refunded if the performance criteria was not met
*Terms could be incorporated into financial agreements
Councilmember Gillaspie stated that there was a need to determine methodology for fee amount that was fair. He noted that TREO was trying to uplift the region and the expertise they provided was bringing in big business. He expressed that he wanted staff to compose performance measures and devise a formula for MTCVB.
Mayor Loomis concurred and recommended returning to the previous method of allotting a percentage of the Bed tax. He noted that it was a performance measure.
Vice Mayor Garner requested a response from MTCVB detailing what they would provide Oro Valley that would specifically enhance the Town as a destination.
Mayor Loomis requested that Staff contact the MTCVB and schedule a presentation for Council.
Vice Mayor Garner stated that he did not want to limit the Town to financial participation agreements. He further noted that he preferred to have requirements and parameters in place before taking a position on funding.
Mayor Loomis noted that economic development funding was not challenged as a result of the Turken vs. Gordon case. He stated that funding was not an issue with respect to the gift clause. He stated that it was necessary to move forward should the future Council wish to use RFP’s and require performance measures for services.
Mayor Loomis opened the floor for public comment.
Oro Valley resident John Musolf stated that Council voted in November 2009 to eliminate community funding and in April 2010, voted to fund agencies if the Council wished. He recommended that the Town advertise for competitive bids.
Oro Valley resident Joe Hornat stated that he was concerned that management contracts were moving too fast and suggested that Council wait to let the contracts until there was an approved budget. He also suggested that the Town should show good faith and budget for TREO and MTCVB. He further suggested paying these organizations so much at a time and implement performance measures that they would need to adhere to.
Oro Valley resident Chris DeSimone stated that TREO was a marketing function and recommended that the money could be better spent on commercial realtors in Oro Valley to market the Town. He stated that MTCVB did not have a performance standard and should be compared with other marketers. He explained that the MTCVB should be put on a limited term contract.
It was noted that payments for TREO were made quarterly and that TREO submitted letters and quarterly reports to staff which is disbursed to Council.
Mayor Loomis stated that he wanted to review $308,000 of recurring funds that were being used for non-recurring expenses and shift those funds into a one-time expense fund. He stated that the $308,000 of recurring revenues could be moved to the General Fund budget and recurring Bed Tax revenues moved back to the Economic Development budget for economic development items.
He stated that over $100,000 of recurring revenues remained that were not earmarked for recurring items.
Mayor Loomis requested another study session to discuss the status of the budget and any outstanding items that should be discussed in a motion to approve the Tentative Budget for the second week in May.
Vice Mayor Garner stated that a projection of duties was needed for the ombudsman position. Building Safety Director Suzanne Smith stated that she felt it was a position that would develop over time; however she speculated that it would be 75% ombudsman and 25% office specialist.
Vice Mayor Garner stated that he wanted the Ombudsman and Cultural Resources positions to be more detailed in the projections of time spent and the amount of work.
Mayor Loomis stated that there needed to be an understanding of resources expended on those jobs. He explained that the actual and projected costs should be tracked in the budget.
Councilmember Snider noted that a tentative budget had never been adopted prior to the swearing in of a new council.
It was clarified that the tentative budget was scheduled for adoption on May 19, 2010.